BISX-listed Colina Holdings (Bahamas) last night said it achieved "moderated" net income of $5.6 million for its 2011 financial year, as its performance was impacted by the slow economy and cut in the Bahamian Prime interest rate. The life and health insurance holding company, which also recorded comprehensive income of $5.9 million, said its bottom line was was affected by reduced individual life sales volumes during the 1`2 months to end-December 2011, when compared to its peak year in 2010. It attributed this to reduced discretionary income for some clients. Colina Holdings (Bahamas) added in a statement that total equity stood at $119.7 million year-end, ahead of solvency requirements set out in the Insurance (General) Regulations, 2010. The company said its balance sheet, which exceeded half a billion dollars for the first time in 2010, had grown to $550 million at the end of 2011. It added that the majority of this asset growth was as a result of the Company's strategy to direct investment funds towards fixed income securities during the year. The focus on fixed income securities has resulted in an overall increase in net investment income, as returns over these security instruments were less volatile than returns experienced in equities over 2011. "Results reflected positive growth in key financial indicators, including net income, shareholder equity and gross revenue for the first three months of the year," said Colina Holdings (Bahamas) chairman, Terence Hilts. "Second quarter results for the company were notably impacted by a reduction in the Bahamian Prime Rate, which required long-term insurers like Colina to increase its actuarial reserves to support future policy benefits. "Given the expected significance of these reserve changes, Colina's actuaries and consulting actuaries worked closely to assess the impact of the change and reflected the effects of the Prime Rate adjustment within the Company's second quarter financial statements, which resulted in reduced total net income and investment earnings at the close of the first half of the year. "However, the company was in a unique position to withstand these changes in the economic landscape, providing fully for this extraordinary change in actuarial reserves in its second quarter results and sustaining profitability through the third and fourth quarters. "Colina's strong capital reserve base and diversified product mix provided the company the flexibility to implement a number of mitigating measures to compensate for the changes in the policyholder reserves to withstand fluctuations in net income." Gross premium revenues were generally flat against 2010, totalling $132.1 million for the 12 months ended December 31, 2011, compared to $131.8 million in the prior year. General and administrative expenses remained at approximately 22.5 per cent of gross premium revenues. "While not unmindful of the challenging economic times we are operating in, the Board remains confident that the company will be able to meet the challenges and opportunities of the coming year," said Mr Hilts. "The company's strategy to further leverage its position as the largest provider of life and health insurance, and related financial planning products in the Bahamas, with a view to expansion outside these borders, provides it with a clear avenue to deliver sustained, profitable growth. I am confident that management has the skills, energy and ambition to capitalise on the many growth opportunities that lie before the company."