Mr. Titterton said that "1998 was a year of strong performance for BF&M's principal operating subsidiaries BF&M Life Insurance Co., Ltd., and BF&M General Insurance Co., Ltd. and a very satisfactory year for other subsidiaries including BF&M Management Ltd."
Mr. Titterton noted that expansion is a challenge in Bermuda because it is a saturated and very competitive market. "The Group is expanding at a very satisfying rate and we are very pleased with our progress in a difficult market. For example, Total Assets increased to $ 170 million at year-end, while Shareholders Equity rose to $70.5 million. Return on Equity (ROE) was 20.9 % and Return on Assets (ROA) was 6.75 %. The Book Value of the Company's shares increased from $11.89 to $ 14.30."
"I am particularly proud that this growth and strong bottom line performance has been accomplished at a time of considerable change for the Group. Over the past two years we have reduced our management team by one third, flattened the management structure and refocused the organization's resources so that the emphasis is on front room services such as customer service and relations and sales. At the same time our back room technical and professional services have been restructured to take full advantage of better-trained professional staff and the availability of improved information technology. Staff have been re-trained and assigned to new teams based on our new customer focus."
Mr. Titterton said that during the year a great deal of time had been devoted to developments aligned with the Group's new focus. "Our Learning Centre has been the focal point for re-training and individual employee assessment and development. Our Management Team has been independently assessed and development needs identified. Our systems and in many respects our way of doing business, have been re-engineered and most teams have been relocated to better facilitate our customer focused initiatives."
" For example, a new Personal Insurance "Customer Service Centre", providing one-stop full-facility customer service, has been developed on the ground floor of the Insurance Building. The building has been completely redesigned and refurbished for this purpose." Mr. Titterton explained that the term "one-stop, full-facility" was not being used loosely. "There is still some training to be completed but already customers are finding that they no longer have to be referred to a variety of different places and people within the Group for different transactions. Customers will be able to deal with a single Customer Service Representative for the full variety of standard transactions, including paying premiums, effecting new insurance, changing existing insurance and even making claims. This service will apply whether the transaction involves covers written by BF&M General or BF&M Life."
"During this period the Scarborough Building was refurbished to provide additional first class office accommodation. A new water-cooled air conditioning system was installed under the driveway of the Insurance Building to service BF&M's main premises and the ACE Building on the opposite side of Pitt's Bay Road."
Mr. Titterton thanked BF&M's policyholders and the general public for their understanding during this lengthy period of construction. "These developments were necessary in order to re-focus the organization and position us for the decade ahead. We are very grateful for the high level of understanding displayed by our customers and the general public despite the inconvenience."
"During the year we also completed the remedial work and testing of our Year 2000 (Y2K) compliance project and the entire project was independently reviewed and completed early in 1999. Our Business Recovery Plan was also completed and an alternate site established so that the Group can continue to function in the event of a catastrophe affecting our buildings or Bermuda as a whole. This plan gives us great confidence that we will be able to provide effective service to our customers when they need us most."
Mr. Titterton said that 1998 was a very busy and successful year and that the BF&M Board, Executive, Management and Staff expected similar success in addressing the challenges of 1999 and beyond.