The Tribune

A BISX-listed life and health insurer has revealed that 2020 first-half profits were down $3m year-over-year after its investment income plummeted 96 percent due to COVID-19's impact.

Colina Holdings (Bahamas), the parent of Colina Insurance Company, revealed that net income attributable to ordinary shareholders dropped by 45.5 percent during the six months to end-June 2020 as the pandemic's effects took hold.

Net income dropped to $3.6m or $0.15 per ordinary share, compared to $6.6m and $0.27 per ordinary share for the same period in 2019. Colina Holdings blamed this on mark-to-market price adjustments on its investment securities, which means revaluations of these assets' value.

The losses resulting from these revaluations were reflected in the insurer's net investment income, which decreased to $0.9m compared to $21.5m in the prior year - a 96 percent fall.

Additional fair value losses were recognised through the revaluation reserve on investment securities classified as "available for sale" totalling $7.8m.

“Local commercial activity has been stifled during the six-month period ending June 30 due to the impact of the COVID-19 pandemic on the Bahamian economy,” said Terence Hilts, Colina Holdings chairman.

“We are pleased that the company continues to have the strong balance sheet to weather income statement volatility, particularly during these times of economic change and uncertainty."

The revaluation adjustments affecting net investment income were also the primary driver for the reduction in total revenues, which totalled $63.5m for the six months ended June 30, 2020 compared to $90.9m in the prior year. That represented a decline of 30.1 percent.

Gross premium revenues through June 30, 2020, were down $4.2m as new business and renewal premiums were challenged by COVID-19. Net premium revenues through June 30, 2020, totalled $53.5m compared to $58.5m for the same period in 2019, which was a fall of 8.5 percent.

The decrease in revenues was offset slightly by a reduction in claims experience, with net policyholder benefits totalling $39.1m for the six months ended June 30, 2020, compared to $44.2m in the prior year.

Offsetting the impact of the negative investment returns was a reduction of provisions for future policyholder benefits totalling $7m compared to an increase in the prior year totalling $12.1m.

The securities valuation adjustments also affected the total worth of Colina Holdings' investment securities as at June 30, 2020, dropping them to $434.8m as opposed to $445.8m at December 31, 2019. Total assets at June 30, 2020, were $778.2m with invested assets comprising 78.1 percent of the total.

On July 13, 2020, the Company held its Annual General Meeting where the Investors ratified the Board of Directors’ approval for the payment of a $0.16 dividend per share, totalling $3.9m, to the Class 'A' ordinary shareholders in respect of the company’s 2019 performance at its recent annual general meeting.

“Prior to any consideration of dividend distributions, we carefully assess the company’s capital position,” said Mr Hilts. “We remain focused on ensuring that the company’s capital base remains sufficiently strong to meet future obligations to its policyholders and shareholders.”