While the COVID-19 pandemic had notable impacts on revenue for two leading Bahamas International Securities Exchange (BISX) listed insurance companies, both Family Guardian and J.S. Johnson registered growth in net income year over year, despite the challenges in the economy.
Both companies have just released their 2020 annual reports, with Family Guardian registering a 34 percent improvement in net income in 2020 and J.S. Johnson ending that 12-month period down 11 percent in total income year over year.
FamGuard Chairman Norbert F. Boissiere said the company recorded net income of $10.8 million, compared to $8.0 million in 2019 and continued to grow shareholder value for the year ending December 31, 2020.
“Earnings per ordinary share increased from $0.71 in 2019 to $1.05 in 2020. Shareholders’ equity totaled $95.5 million. The company’s balance sheet remained strong with total assets of $361.8 million at year end. While the pandemic impacted traditional methods of premium collection, gross premium income totaled $111.4 million, a 0.6 percent increase over the prior year,” he said in the chairman’s report.
“Gross written premiums continue to increase steadily, charting a seven-year trend and reflecting the public’s confidence in our products and financial strength. Benefits paid to policy owners for death claims, medical expenses, policy maturities and other benefits totaled $76.5 million in 2020, compared to $84.8 million in 2019. The decrease was attributed to a decline in medical claims as normal access to non-emergency care and travel was restricted due to the pandemic.”
However, Boissiere noted the impact of the volatility of the equities market on investment income.
“The group took strategic action to offset variances through adjustments to its long-term, fixed rate investment assets portfolio. Increases in mortgage and premium receivables provisions reflected the economic fallout from COVID-19,” he said.
“At the same time, the group took deliberate steps to control expenses to help offset the pandemic’s financial impact on operations.”
FamGuard stated its group reported total revenue of $125.7 million for the 12-month period, a decline of 3.3 percent compared to the $129.9 million reported in December 2019.
“Net fair value losses from fluctuations in market prices on investment assets along with a reduction in annuity and other deposits were the main contributors to the negative revenue variance, reflective of the impact of the pandemic,” the company revealed.
“However, despite the challenges, gross premium income exceeded the prior year by 0.6 percent, ending the year at $111.4 million and continuing the trend of positive growth over the last seven years.”
As for J.S. Johnson, the company reported total income of $24.8 million in 2020, compared to the $27.8 million registered in 2019.
Net income increased to $6.58 million last year from $6.20 million in 2019.
Managing Director Alister I. McKellar said the upheaval caused by the pandemic impacted business, as total income dropped by almost 11 percent and net premiums declined by 6.5 percent for the year, and as individuals and companies grappled with the inevitable consequences of lockdowns and a huge spike in unemployment.
“We reported a slight increase of nearly six percent in consolidated net income over 2019, which was an unexpected, but welcome development. While that figure largely reflects a 68 percent decrease in Hurricane Dorian expenses – from $4.8 million to $1.8 million – it was also boosted by a $2,556,647 increase in net income within our underwriting division,” he said.
“A quiet 2020 hurricane season, despite the number of storms in the region, certainly contributed to those results, but also helped to bring our loss ratios down to a more normal level, from 108 percent in 2019 to 45 percent this year.”