Despite market factors that continue to apply pressure to Bahamas First Holdings Limited’s top line, the company registered a 7.3 percent improvement in premium levels during the 2022 financial year compared to the previous year.
Overall, the company saw growth from $178.2 million in 2021 to $191.2 million at the end of last year.
Group President and Chief Executive Officer Patrick Ward said in the company’s quarterly report for the 12-month period ending December 31, that although the economic landscapes in The Bahamas and Cayman Islands supported business developments in 2022, a lack of reinsurance capacity for catastrophe property damage covers continued to constrain growth near the end of the year.
“During the fourth quarter of 2022, we booked gross income of $42.7 million, which is 0.9 percent above the premium levels achieved during the same period in 2021. Based on the level of GDP improvement in our operating jurisdictions, we believe that the top line performance for the current quarter and, indeed, the full year, would have been better if we were able to access additional capacity from the international reinsurance markets during the year,” he said.
“For reasons previously identified, this was not possible; however, because it was a market-wide problem, we did not find ourselves at a competitive disadvantage. As foreshadowed in the preceding quarter, the negotiations for our reinsurance contracts for 2023 proved to be especially challenging. The combination of regional and global factors that led to this scenario will likely persist for the next twelve months and possibly longer. We were able, nevertheless, to successfully place all of our reinsurance contracts for 2023 at the best terms available, in what has been described as a once-in-a-generation renewal cycle.”
Ward has long warned of rising premium costs in The Bahamas and the wider region, particularly in the aftermath of devastating storms Hurricane Dorian (2019) and Hurricane Ian (2022).
Earlier this month he told Guardian Business that because of the forces effectively driving premium prices up, “I don’t see that abating in the next 12 months”.
In the quarterly report, Ward said the health segment led the way, with robust growth driven mainly by local business.
“The P&C [property and casualty] and health business segments registered growth in both jurisdictions, with the health segment leading the way with a robust year-over-year increase in premium. Overall net underwriting income, however, saw a material dip, compared to the prior year, finishing at $29.4 million, compared to $33.0 million in 2021,” he said.
“The motor portfolio in The Bahamas experienced a reduction in underwriting profitability, due mainly to a return to more normal frequency and severity of damage claims and prior year adverse loss development. Additionally, the Cayman health business continued to perform below our expectations.”
Bahamas First reported a sharp rise in comprehensive income during the fourth quarter of $7.1 million, compared to the $5.8 million during the fourth quarter of 2021, due to the revaluation of its land and buildings.
