BF&M Produced $8.9 Million Profit Despite Hurricane Fabian Loss

President & Chief Executive Officer, Glenn Titterton, explained that Hurricane Fabian represented the worst catastrophe loss to Bermuda in the last 70 to 100 years and that a Category 3 hurricane was obviously a very serious event. "As Bermuda's leading insurer it is to be expected that BF&M would carry by far the largest share of insured losses." "We maintain a conservative reinsurance programme with a very strong panel of reinsurers". "Our gross Fabian losses are estimated at over $60 million but our net loss, made up of our retained losses, the loss of our reinsurance profit commission and other expenses directly related to Fabian is about $3.7 million." "Setting this to one side, BF&M had a very strong year."

Chairman, Lt. Col. Michael Darling paid tribute to the management and staff who had produced excellent results despite Fabian. "Hurricane Fabian would have been a severe test of any insurer's resources and the Board are intensely proud that our management and staff were able to deliver exceptional service to our customers in the face of such extraordinary circumstances."

Mr. Titterton pointed to the growth and success of the company. "Gross Premium Written increased by 16% to $95 million while Net premiums earned increased by 17% and Investment Income increased by 48%." "While Total Expenses increased by 20% due to a 30% increase in Claims and Benefits, Operating Expenses were held to less than a 1% increase."

Referring to the strength of the companies, Colonel Darling confirmed that "Assets totaled $276.6 million and Shareholders Equity was $66.3 million". "$3.2 million was paid as dividends to shareholders during the year." BF&M Limited and its two largest subsidiaries BF&M Life and BF&M General are rated "A- (Excellent)" by A. M. Best.

Mr. Titterton said he was proud that "BF&M is the market leader and innovator". "We continue to expand our real-time on-line facilities at www.bfm.bm and we believe that our substantial lead in e-business positions us well as more sophisticated customers demand easier access to insurance services and to their insurance information." "We continue to be proud to be an "Investor in People" and amongst the many training and educational programmes that we offer, we salute the many staff who have now completed the International Computer Drivers Licence." "The Group Life and Long term disability business acquired from Sun Life in 2002 has been successfully integrated and our networking agreement with Sun Life has brought real benefit to both parties but particularly to our customers." "The development of PXRE House by our 60% owned subsidiary, Barr's Bay Properties Limited, is complete and the complete renovation of the Insurance Building is underway." "Subsequent to year-end we reached agreement with Canada Life to acquire their group business in Bermuda and to act for them in other lines." " We also formed North Atlantic Asset Management Limited and acquired Osprey Investments." " There is considerable momentum at BF&M that, combined with the enthusiasm and commitment of our team, we believe will lead to the further growth and success."

"We are committed to our customers and to Bermuda." "In a rapidly changing business environment we intend to be "winners". I thank and congratulate our entire team, who should take considerable pride in our success in 2003, particularly in the midst of Hurricane Fabian and the disruption of our own building works."