Procurement News Notice |
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| PNN | 10847 |
| Work Detail | Bahamas First has unveiled a 94 per cent year-over-year increase in first half profits, although this was driven largely by a $4 million gain in the value of its investment holdings. #The property and casualty insurer saw the unrealised gain in the value of its investment holdings, in both equity and debt securities, jump by 1,648 per cent to $4.264 million at end-June 2016 compared to just $243,946 the year before. #The investments that drove the increase were not disclosed in Bahamas First’s report to shareholders, and this also masked a 10 per cent year-over-year fall in its net underwriting income. #This figure, which measures the performance of Bahamas First’s core insurance operations, fell to $11.446 million as at end-June 2016, compared to $12.658 million the year before - a more than $1.2 million decline. #The fall resulted from a combination of lower gross written premiums, which represents Bahamas First’s top-line revenues, and a 6 per cent increase in net claims incurred. #Ian Fair, Bahamas First Holdings’ chairman, told shareholders: “Investment income during 2016 has exceeded both budget and prior year by significant amounts as a result of the sharp uplift in the value of our equity and international bond holdings, resulting in an unrealised gain of $4.3 million.” #Besides the increase in the unrealised value of its investments, Bahamas First also experienced an 8 per cent increase in actual investment income, which jumped from $1.086 million to $1.178 million. #Detailing the forces impacting Bahamas First’s core general insurance business, Mr Fair said increased competition was continuing to pressure premium rates being levied on consumers. #“The present insurance market conditions for property and casualty insurers and intermediaries in both Bahamas and Cayman are best characterised by intense competition, leading to price reductions,” he confirmed. #“Rates in our property class of business continue to decline relative to the prior year, resulting in a 5 per cent reduction in gross premiums written. #“Fortunately, the benefit of a higher level of incoming base commissions (5 per cent increase), coupled with a decline in our own cost of reinsurance protection (14 per cent decrease), has resulted in additional income to help mitigate the effect of rate reductions. #“Net premiums written and earned declined by 6 per cent due to our intentional reduction in the retention of the motor/liability account.” #Mr Fair said all Bahamas First’s business lines had produced improved claims ratios compared to 2015, apart from its Bahamian auto portfolio. #“The motor line experienced an elevated loss ratio owing to adverse developments on a few prior year claims, primarily contributing to a 6 per cent increase in net claims incurred,” the Bahamas First chairman wrote. #“As a result of the aforementioned, the group’s net underwriting income decreased by 10 per cent to $11.4 million.” #As a result of all this, Bahamas First’s total comprehensive income increased from $3.033 million to $5.878 million year-over-year. #Mr Fair said Bahamas First had contained operating expenses, which grew by just 1 per cent during the 2016 first half, hitting $11.011 million compared to $10.955 million the year before. #He added that Bahamas First’s expense ratio was set to improve during the 2016 second half, due to the company redeeming 50 per cent of its Series 1 Corporate Bonds - some $3.75 million - in July. #“In April of this year, our Cayman subsidiary paid dividends totalling $1.4 million of which 87.65 per cent inured to our benefit,” Mr Fair added. #“Cayman First continues to perform well contributing $1.25 million towards the group’s comprehensive income, a 37 per cent improvement over the prior year. #“The group’s equity attributable to owners of the parent increased to $61.2 million, compared to $54.6 million at June 2015, primarily as a result of the operational earnings generated during the period,” he continued. #“The group’s return on equity for the 12 months ended June 30, 2016 stands at 17.4 per cent, on track to exceed our 2016 budget.” #Breaking down Bahamas First’s results by geographical location, its Bahamas business suffered a 3.7 per cent drop in gross written premiums during the 2016 first half, falling from $46.794 million to $45.065 million. #As a result, net underwriting income for the Bahamas operation fell by almost $1 million or 12.3 per cent to $7.095 million, compared to $8.09 million in 2015. #However, with the investments boost, the Bahamas’ bottom line contribution more than doubled year-over-year, leaping from $1.969 million to $4.437 million. |
| Country | Bahamas The , Caribbean |
| Industry | Financial Services |
| Entry Date | 15 Oct 2016 |
| Source | http://www.tribune242.com/news/2016/sep/09/bahamas-first-94-first-half-profits-jump/ |
