FamGuard payouts drop $3.7m on COVID fall-out


Tribune Business Editor


Family Guardian's chairman has attributed a $3.7m decline in policyholder payouts for the nine months to end-September 2020 to a fall-off in medical claims caused by COVID-19.

Norbert Boissiere, the BISX-listed life and health insurer's chairman, explained the seemingly counter-intuitive drop by pointing out that the pandemic had caused other medical/surgical procedures to be deferred or postponed as resources were devoted to fighting the virus.

And the mixture of lockdowns, curfews and other restrictions had further inhibited the access of many Bahamians to medical care. "Policyholder benefits totaled $59.6m compared to $63.3m for the nine month period of 2019," Mr Boissiere said of the near-6 percent year-over-year decline.

"The positive variance in benefits continues to be attributed to a decline in individual and group medical claims incurred during the period as restrictions on movement and a decline in elective procedures impacted the normal access to medical care."

His comments came as FamGuard Corporation, Family Guardian's BISX-listed parent entity, unveiled results for the 2020 third quarter and first nine months showing that the life and health insurer continues to hold firm despite the pressures inflicted upon itself and its clients by COVID-19.

While net income for the first nine months was down by almost $1m or 14 percent, standing at $5.94m compared to $6.902m the year before, the latter figure was boosted by some $2.631m in profits from discontinued operations - likely the sale of Family Guardian's pension, investments and capital markets business to Leno.

Without that, Family Guardian's net income for the first nine months of 2020 would have been almost $1.68m ahead of the prior year's. And its profits for the three-month period to end-September were also flat against last year, standing at $1.443m compared to $1.36m - with the latter also bolstered by profits from its discontinued operations.

"The group recorded revenues totaling $93.1m for the nine months ended September 2020, which trailed the $96.2m recorded in September 2019," Mr Boissiere said in his message to shareholders. "Net fair value losses from fluctuations in market prices continue to be the main contributor to the negative revenue variance, reflective of the impacts of the pandemic. As a result, investment income declined by 11.8 percent over the corresponding prior period."

Family Guardian incurred a 1.334m loss on the value of its various investment holdings, due to their reduction in worth caused by COVID-19, through the three months to end-September 2020.

"Annuity and other deposits have declined by $1.1m, as anticipated in the current economic climate. While the COVID-19 pandemic has impacted our traditional methods of premium collection, gross premium income for the nine-month period totaled $83.5m, a 1 percent increase over the prior period through the resilience of our agency force," the Family Guardian chairman added.

"Operating expenses continue to show a positive variance, while increases in mortgage provisions and provisions on premium receivables have increased during the period due to the increase in the credit risk exposure on these portfolios stemming from the economic and social challenges of the pandemic.

"The company’s balance sheet remains strong with total assets exceeding $353m, of which investment assets comprised $271m, representing 77 percent of our total asset base. The company’s insurance subsidiary, Family Guardian Insurance Company, continues to maintain capital solvency measures above the local and international minimum requirements."

Mr Boissiere said Family Guardian was maintaining a "cautiously optimistic approach" to managing the COVID-19 pandemic, which resulted in its declaration of a $0.06 per share dividend - worth a collective $600,000 - to shareholders that will be payable on November 26, 2020.


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