The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

J S Johnson’s managing director is warning that “industry headwinds” across its business have slashed profits by 12.54 percent or almost $900,000 for the year to end-September 2023.

Alister McKellar, in his latest quarterly update to the BISX-listed firm’s shareholders, said a 16 percent increase in expenses had dampened the performance of its core agency and brokerage business during the first nine months of the year.

And Insurance Company of The Bahamas (ICB), the underwriter through which J S Johnson places much of its property and casualty business, was hit by global reinsurance market “hardening” and increased rates as well as an inability to expand coverage capacity within the Caribbean.

“Industry headwinds negatively affected both segments of our business through September,” Mr McKellar wrote. “Despite an increase in net revenue from contracts with customers ($17.5m to $17.9m), and a three-fold increase in interest income ($33,911 to $108,558), a 16 percent increase in other expenses dampened results for our agency division, which registered a 2 percent decline in net income ($6.1m to $6m) for the period.

“Our underwriting division, as well, continued to struggle with the fallout from a hardening of the global reinsurance market and an inability to expand sufficient coverage capacity within our region.

“Although several line items in this segment remained relatively steady compared to last year, insurance service expense and other expenses, an increase of nearly 6 percent in net expense from reinsurance contracts held (premiums ceded) contributed to a precipitous decline in net income from $813,007 to just $91,802.”

“As a result, consolidated net income through September decreased 12.54 percent over the same period last year from $6.93m to $6.06m,” Mr McKellar added.

The Bahamian economy, however, seems to be forging ahead nicely, as the opening of the renovated port area in Nassau and record numbers of visitors bolster our tourism industry. Let’s hope this success can translate into a more positive and productive economic environment for all Bahamians.”

The 2023 hurricane season is due to close this Thursday with no storms impacting The Bahamas. However, writing his third quarter update several days earlier, Mr McKellar said he was wary of letting his guard down.

“I’ve prematurely celebrated the waning of hurricane season in past reviews, only to get blindsided by the advancement of a late storm heading toward our shores. This year I checked the radar before penning this message and noticed a few colourful cloud blobs still swirling around in the Caribbean. So, I’m not celebrating anything yet,” he added.

“Insurance companies get uneasy each year from June through November, thanks to the increased potential for tropical storm damage and loss. El Nino’s calming influence on Caribbean hurricane activity may have indeed been our friend again this year, but I’ll reserve any victory dance until my fourth quarter report.”