By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian health insurers suffered a near-$15m year-over-year decline in group premiums last year due to the Government ending COVID-19 protection plan for visitors.

The Insurance Commission of The Bahamas (ICB), in its just-released 2022 annual report, disclosed that life and health insurers collectively saw a modest $3.2m increase in their net income last year to $36.7m despite the fall-off in group health premiums.

“Group health premiums decreased by $14.8m (6.1 percent) to $227.9m. This reduction is largely due to the elimination of the Government’s COVID-19 Travel Protection Policy in June 2022. Individual health insurance premiums written increased by $18.5 million (34.6 percent) during the year to $71.7m,” the regulator disclosed.

“Individual life premiums totalled $134.1m, reflecting minimal growth of less than 1 percent, while group life premiums grew by $1.1m (7.1 percent) to $16.2m at the end of the year. Net income for the year amounted to $36.7m (2021: $33.5m), a moderate growth of $3.2m (9.5 percent), as net policyholder benefits declined by $8.8m (2.7 percent), while expenses increased by $5.4m (3.8 percent). The long-term market experienced a combined loss ratio of approximately 107.49 percent.”

The Bahamian life and health insurance market is dominated by Colina and Family Guardian, both of which are BISX-listed companies, plus BAF Financial. “The underwriting results for the long-term market are buttressed by investment returns,” the Insurance Commission of The Bahamas added.

“The long-term market earned an investment return of 4.1 percent (2021: 4.6 percent) during the year. Total investments increased by $130.7m (10.5 percent) to stand at $1.38bn. Despite this growth in invested assets, investment income - which amounted to $54m (2021: $58.9m) for the year - declined by $4.9m (8.4 percent) due to unrealised losses in foreign denominated securities.

“Government securities, which comprise 53.7 percent of invested assets, grew by $113.7m (18 percent) to stand at $742.3m. Cash and deposits increased by $62.3m to $177.3m, and mortgage loans declined $4.3m (4 percent) to $116.8m. Total assets for the market grew by $54.6m (3.6 percent) to $1.6bn (2021: $1.5bn),” the regulator added.

“Total insurance liabilities increased by $36.4m (3.8 percent) to $1bn. Technical reserves increased by $25.6m (3.5 percent) to $750.1m, and other insurance liabilities grew by $10.8m (4.5 percent) to $252.2m. Other liabilities, which account for 9 percent of total liabilities declined by $10.6m (9.7 percent) during the year, resulting in a net increase in total liabilities of $25.7m (2.4 percent) to $1.1bn (2021: $1.08bn).”

Meanwhile, describing the Bahamian external insurance market as “static”, the Insurance Commission of The Bahamas said: “Although there was an increase in the number of captive cells during 2021, the net premium remained relatively stable, totaling $69.5m, a 1.1 percent increase over the prior year. Premiums related to the increase in the number of captive cells were offset by the cancellation of one captive insurance company.

“Gross premiums in the captive insurance market for 2021 rose by $1.9m (2.5 percent) to $78.6m. The majority of registered captives are cell captives which utilise reinsurance pooling arrangements for risk distribution. Reinsurance premiums assumed and ceded, of $37.2m and $46.3m, respectively, changed by less than one percent from the prior year.

“Net income in the captive market increased by $6.6m (10.4 percent) to $70.1m, as claims and expenses declined by 23.4 percent and 4.1 percent, respectively, while investment income improved by 30 percent to $21.2m, including unrealised gains,” the regulator added.

“Invested assets in the captive market expanded by $24.3m (6.3 percent) to $408.9m, and total assets increased by $19.1m (3.3 percent) to end the year at $592m. The primary asset categories for this market were receivables (23 percent), cash and deposits (21 percent) and listed equity securities (18 percent).

“The non-captive market, which consists predominantly of insurers providing variable life insurance, generated net income of $3.5m, an increase of 2.1 percent over the prior year. Assets in this market increased slightly by 1.7 percent, totalling $1.4bn, with approximately 90 percent of the assets being maintained in the separate accounts of variable life insurance policies.”

Turning to agent and broker intermediaries, the Insurance Commission said it received 26 complaints during 2022 from consumers relating to policy lapses, denials of policy reinstatement, and allegations of “misrepresentation and non-disclosure”. Sanctions were issued in just one matter.

“Of these complaints, 10 were resolved and 16 remained under review at the end of the year,” the regulator added. “During the year, 11 adverse reports against salespersons were received. These included allegations of misappropriation of client funds, failure to submit premiums on behalf of clients and falsification of client documents and signatures.

“Six matters remain under active investigation, one matter has been successfully resolved with a sanction issued, and four require further information to proceed.”