BF&M Announces Q2 2013 Earnings of $10.2 Million

Hamilton, Bermuda – 17 September, 2013 – BF&M Limited (the “Company”; Ticker: BFM.BH) today announced shareholders’ net income for the six month period ended 30 June, 2013, of $10.2 million, resulting in an annualized return on shareholders’ equity of 10%. Shareholders’ net income for the comparative six month period of 2012 was $12.2 million. 

President & CEO, John Wight stated that “Financial results for the first six months of 2013 were down from the corresponding period in 2012, principally as a result of further impairments on Bermuda based properties where BF&M holds a first mortgage, and the rise in interest rates in the 2nd quarter that decreased the value of BF&M’s bond portfolio. The Company’s core operations relating to insurance and investment advisory and administration services continued to perform well, despite the ongoing challenges that impact our individual, commercial, and group customers in Bermuda, Barbados, and Cayman, where the majority of the business is operated from.”

Mr. Wight added that “the Company’s balance sheet continues to be very strong. Equity attributable to shareholders at 30 June 2013 was $213.4 million.  General fund assets totaled $1.1 billion of which $94.5 million was held in cash and short term deposits. Based on the Company’s strong balance sheet, the Board of Directors maintained the dividend of 20c per share for shareholders of record at 30 September 2013.”

BF&M was very pleased to have A.M. Best reaffirm last week the A (Excellent) financial strength ratings of its two principle Bermuda based subsidiaries, BF&M General Insurance Company Limited and BF&M Life Insurance Company Limited. There is no insurance company in Bermuda writing domestic insurance business with ratings this strong. A.M. Best cited BF&M’s “consistent positive net income, steady premium growth, high level of capital, and strong market share.” BF&M’s other two principal operating businesses, the Insurance Corporation of Barbados Limited, and Island Heritage Insurance Company Ltd, have previously received financial strength ratings of A- Excellent.

When comparing the results of 2013 with 2012, it is important to note that BF&M Limited acquired Island Heritage Holdings, Ltd., a leading Caribbean company with extensive insurance operations, on 30 March 2012, and thus the 2012 Q2 consolidated BF&M earnings do not include the 2012 Q1 results of this company.

Gross premiums written for the period were $184.1 million, an increase of 16% over 2012.  Investment income for Q2 reflected a $17.3 million decrease in the value of investments for the period as the marginal increase in interest rates decreased the fair value of the company’s extensive fixed income portfolio. Offsetting this was a $17.2 million decrease in the value of policyholder benefits as a result of the company’s disciplined asset liability matching policy which limits volatility of reported earnings as a result of interest rate swings in either direction. Commission and other income increased 16% to $19.8 million. Short term claims and adjustment expenses increased by 26.7% to $13.4 million and life and health policy benefits decreased by 36% to $32.5 million. Operating expenses increased 10% to $33.0 million.

BACKGROUND

BF&M Limited is the holding company of the BF&M Insurance Group. The two largest operating companies within the Group are BF&M Life Insurance Company Limited, a leading provider of life, health and pensions products, and BF&M General Insurance Company Limited, the leading general insurer providing all forms of property, casualty, motor and marine products. The group includes several other companies including Bermuda International Insurance Services Limited, Bermuda International Reinsurance Services Limited, Marchmont Insurance Company Limited, BF&M Investment Services Limited, BF&M Properties Limited, (including Scarborough Property Holdings Limited and Barr’s Bay Properties Limited), Hamilton Financial Limited, Island Heritage Holdings Limited, and a 51.5% interest in the Insurance Corporation of Barbados Limited.

For further information contact:

Mr. R. John Wight C.A, CPCU, President & Chief Executive Officer

Phone 295 5566, Fax 292 8831

e-mail jwight@bfm.bm