Bahamas First reports 47% rise in claims

A 47 percent uptick in overall claims during the fourth quarter of 2020 led to a 13 percent decline in net underwriting income for Bahamas First Holdings (BFH), according to its chairperson, who said she anticipates continued challenges in retaining business.

Alison Treco said while BFH claims were trending positively for the first three quarters of the year, several fires in The Bahamas and an increase in health claims in the Cayman Islands led to the decline.

“We noted an uptick in the use of general health services after restrictions were lifted in Cayman, due to the positive response to the pandemic. As a result, our net underwriting income for the quarter was down by 13 percent,” she said in BFH’s unaudited results for the year ending December 31, 2020.

“Quarter four saw a further decline in the unrealized loss on investment of $0.5 million, compared to a gain of $1.6 million in the prior year, accounting for a swing in quarter on quarter of $2.1 million. The prior quarter’s loss was partially offset by an increase in other income of $1.2 million, due to a loss on building revaluation recognized in 2019.”

Treco said BFH also anticipates that challenges will continue regarding the retention of business, particularly after gross written premiums declined five percent during the fourth quarter, compared to the same period last year.

Despite these challenges in the final quarter, Treco said the overall performance of gross written premiums for the year remained relatively stable despite 2020’s economic challenges.

“As expected, there was a significant increase in net underwriting income from $21 million in 2019 to $33 million in 2020, due to the absence of a catastrophe in 2020. Investment income negatively impacted results due to an unrealized loss of $2.9 million recorded for the year, which was offset to some extent by an increase of $1 million in other income,” she said.

“Expenses increased marginally by two percent. During the year, the group implemented a new software that is designed to bring the group to a new level of online interaction with its customers, brokers and agents. As expected, we incurred additional costs related to this implementation. We also incurred costs related to COVID-19, as we continue to implement best practices to keep our staff and customers safe.”

Treco said BFH ended 2020 with total comprehensive income of $5.3 million, of which $4.9 million was attributable to owners of the group.

She added that the markets in Abaco and Grand Bahama are slowly recovering following Hurricane Dorian and the Bahamas operations have benefited from premiums generated from engineering activity in the rebuilding process.

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