By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas First would have produced another profit record in 2015 had it not been for the net $1.3 million loss associated with Hurricane Joaquin, its chief executive yesterday confirming it paid all storm-related claims from its own resources.

Patrick Ward told Tribune Business that the Bahamian property and casualty underwriter had “no complaints” over last year’s financial performance, even though total comprehensive income was down 9 per cent year-over-year.

Emphasising that the results matched the company’s expectations, Mr Ward said Bahamas First was targeting “at least a repeat” of its $8.982 million total comprehensive income for 2015, barring a major catastrophe event such as a Joaquin-type storm.

“In terms of where we wanted to end up, there’s no complaints from our side,” the Bahamas First president and chief executive told this newspaper.

“We would have been ahead of last year, had it not been for that [Joaquin]. The results are pretty much spot on with our budgeted expectations for 2015, notwithstanding that we had a hurricane loss.

“That demonstrated the diverse portfolio we have in the Bahamas and the Cayman Islands. That combined gives us a very robust business model.”

Mr Ward emphasised that Bahamas First’s acquisition of its now-re branded Cayman First business was working as planned, providing the combined group with geographical earnings diversification that will help to mitigate the impact of a major hurricane event in one nation.

Describing the Cayman Islands’ contribution as “significant”, Mr Ward disclosed that it accounted for 35 per cent of Bahamas First Holdings’ combined bottom line.

“It creates a more sustainable earnings platform for the future, and that mitigates some of the potential impact on our earnings” from hurricanes hitting the Bahamas, he added. “The diversification gives us a spread of the impact”.

Asked whether Bahamas First was seeking to match or exceed 2015’s performance this year, Mr Ward replied: “That’s certainly our objective; to have at least a repeat of what we did in 2015.

“We’re pretty confident that barring a major catastrophe event or hurricane event, that’s likely to be the case.”

Bahamas First was unable to match its record-setting year of 2014, when total group comprehensive income came in at $9.903 million. This was largely due to the 120 claims it received as a result of Hurricane Joaquin, producing $5.3 million in gross claims and a net loss of $1.3 million.

Mr Ward confirmed that the underwriter was able to settle Hurricane Joaquin-related claims using its own cash resources, rather than call in its reinsurers, who finance the majority of Bahamas-based risks.

“That was really a function of the fact that the hurricane losses were manageable within our resources,” he told Tribune Business.

“Rather than go through the administrative logistics of instituting a cash call on our reinsurers, we dealt with that hurricane event as a normal claims business, and will make recoveries through our quarterly accounts.

"It demonstrates that we have sufficient internal liquidity to handle losses of this kind.”

Bahamas First’s annual report added: “During the fourth quarter of 2015, we utilised a significant amount of internal cash to settle the claims resulting from Hurricane Joaquin without making a cash call on the reinsurers that participate in the losses, but we will recover the amounts related to their share of the claims in the normal course of business.

“Consequently, net cash flows from operating activities declined to $4.3 million during 2015.”

Mr Ward said Bahamas First’s net worth now exceeded $60 million for the first time in its history, adding that its financial strength was enabling it to accelerate the repayment of debts.

Its Board of Directors resolved on March 11, 2016, to redeem early some $3.75 million, or 50 per cent, of its Series 1 Corporate Bonds, even though these are not due until 2020.

The insurer has also “accelerated repayment” of the $5 million loan that Bahamas First took out to purchase more shares in its Cayman subsidiary via a rights issue in 2014.

The principal balance remaining on that loan fell from $4.809 million at end-2014 to $1.729 million at December 31, 2015.