The ratings of BF&M Life, BF&M General and Island Heritage reflect their good earnings, strong risk-adjusted capitalization, increased business diversification and operational efficiency. These companies have posted favorable net income for the past five years. The majority of earnings is generated by BF&M Life’s group health line of business, which in recent years benefited from a moderated medical cost trend achieved in part through enhanced wellness initiatives and improved pricing for overseas treatments. The positive operating results have contributed to the strong level of capitalization at each company. The capital levels at BF&M Limited’s insurance subsidiaries remain more than adequate to support their current level of business and insurance risks.
These positive rating factors are partially offset by investment income volatility and its impact on net earnings and Bermuda’s limited growth opportunities. In addition, the organization’s geographic locations are exposed to catastrophic weather events and dependence upon reinsurance with quality reinsurers to mitigate this exposure. The organization’s investment income has experienced substantial fluctuations, primarily from changes in the fair value of fixed-income securities due to movement in interest rates. In addition, during 2015, investment earnings were impacted by mortgage impairments, including a
Furthermore, BF&M Life and BF&M General operate mainly in the local
The ratings for ICBL reflect the company’s supportive risk-adjusted capitalization, favorable operating results in recent years and leading market position in
The rating of BF&M is in accordance with
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