Bahamas First Holdings, while revealing in its quarterly report that it experienced minimal downside impact as a result of Hurricane Dorian last year and COVID-19 in the first half of 2020, stated that the pandemic is likely to impact the business “into the future”.
Alison Treco, chair of the board, said in her report on the financials for the six months ending June 30, 2020, that performance figures were relatively stable year-on-year, especially given Dorian and the pandemic.
“The first half of 2020 presented many challenges which will continue to impact the group for the rest of the year and into 2021,” Treco said.
“We are fortunate to report that our performance figures to June 30, 2020 have held relatively steady compared to the comparative period in 2019. Up to June 30, 2020, Bahamas First Holdings Limited reported a minimal decrease of 1.7 percent in gross written premiums over the prior year and comprehensive income attributable to owners of the group for the six months ended June 30, 2020 was $1.5 million, compared to $1.7 million for the same period in 2019.”
Treco said the company foresaw certain outcomes because of Dorian, including a decrease in premium income and that that decrease would be mitigated by contractors seeking insurance reinsurers suggesting increased rates for properties insured for catastrophe.
Treco said though that COVID-19 caught the company off guard.
“Restrictions on business operations and the significant increase in unemployment rates has and will continue to impact all of us for some time into the future,” she said.
“The months ahead will be some of the most uncertain the group has ever encountered. Until a long-term solution is determined for the virus, the economies in which we operate will struggle to rebound to normal levels.
“We expect the impact of high unemployment and closure of businesses to ultimately present challenges in premium collection and adversely impacting equity investments. The group will make adjustments as necessary to minimize these potentially adverse effects.”
The company said it has seen some deterioration in its general insurance portfolio, though “the impact has not been reflected in its net underwriting income, due to the improved claims experience, which recorded a 37 percent improvement compared to 2019.”
Treco said in the report that the company’s investment income in The Bahamas took a $1.1 million hit in the first half of the year.
“To summarize the group’s financial performance, although there was a slight decrease in gross written premiums for the period, Bahamas First Holdings Limited achieved an underwriting income of $15.2 million, which was in excess of the prior year result of $13.2 million,” she said.
“This underwriting result was achieved primarily through better claims experience. Whilst total operating expenses were slightly higher than last year, a major factor contributing to this was the cost of conversion of reinsurance payments received in relation to Hurricane Dorian, which were approximately 15 percent of total expenses for the period. The group’s equity attributable to owners of the group increased to $59.4 million, compared to $58 million at December 2019.”
According to her report, A.M. Best upheld the group’s A-(Excellent) credit rating with a stable outlook and the company reported that Cayman First continues to perform strongly, contributing $1.9 million towards the group’s profit for the period.