Bahamas First closes $4.28m premium 'gap'

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Patrick Ward

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas First’s top executive yesterday said the insurer has largely closed a $4.276m premium income “gap” that opened towards the 2020 first quarter end due to the COVID-19 lockdown.

Patrick Ward, the property and casualty underwriter’s president and chief executive, told Tribune Business that top-line gross written premiums performed significantly below expectations during the three months to end-March due to the pandemic restrictions implemented by the government over the period’s last two weeks.

This dropped premium revenues by 9.9 percent against Bahamas First’s expectations, causing them to be down by $4.276m at $38.853m compared to the $43.13m projected in the insurer’s budget. However, Mr Ward said it had managed to catch up in the second quarter as the easing of lockdown restrictions enabled persons to visit their agent/broker and make payment.

“It was more to do with the lack of access,” the Bahamas First chief said of the failure to meet premium expectations. “It was related to the shutdown, but more to do with access. What we found in the second quarter was a lot of that gap was effectively eliminated in terms of premium that came in compared to what we experienced ourselves in the prior year.

“We were almost entirely shut down from doing any transactions. A lot of people, although they could have explored going online, wanted to come in and make the payments physically. We were, though, expecting some fall-off in business. There are some clients who did not have renewals because they’re property was destroyed or damaged beyond repair, in the case, of vehicles, by Dorian.

“But at this point there’s nothing that would indicate we’re much further behind where we thought we’d be at this point in the year.” Bahamas First’s net underwriting income for the 2020 first quarter was also down against expectations, standing at $7.175m compared to a $7.249m projection.

Total operating expenses, though, came in some $458,821 lower than the $7.005m budgeted, which Mr Ward said was another side effect of the COVID-19 lockdown which “eliminated a lot of activity” that Bahamas First had planned in late March.

However, the property and casualty insurer’s $891,280 net loss for the 2020 first quarter was some $1.57m lower than its internal budget forecast, which had projected a $678,753 profit. The company’s total comprehensive loss of $919,139 was also some $1.538m below expectations of a $619,762 positive return.

Compared to the 2019 first quarter, Bahamas First’s total comprehensive income was off by $1.095m when set against the prior year’s $175,863 bottom line.