NASSAU, BAHAMAS — Colina Holdings Bahamas Limited, the holding company of life and health insurer Colina Insurance Limited has reported a 45 percent drop in net income.
Colina Holdings said the drop is attributable to ordinary shareholders for the first six months of the year, with mark-to-market revaluation adjustments resulting in a 30 percent loss in total revenue over the same period last year.
The losses were recorded in its unaudited consolidated interim financial results for the six months ended June 30, 2020.
Colina Holdings reported that it had recorded net income attributable to ordinary shareholders of $3.6 million or $0.15 per ordinary share. I
n comparison, for the same period in 2019, it had recorded net income attributable to ordinary shareholders of $6.6 million and $0.27 per ordinary share.
The company noted that its results continue to be significantly impacted by mark-to-market or current market value price adjustments on its investment securities.
“These mark-to-market revaluation losses were reflected in net investment income which has decreased to $0.9 million compared to $21.5 million in the prior year. Additional fair value losses were recognized through the revaluation reserve on investment securities classified as available for sale totaling $7.8 million. The company ensures that as part of its long-term strategy, that it maintains a strong capital base to withstand these interim periods of price volatility,” the company stated.
“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, Chairman of CHBL.
“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,” said Hilts.
The company noted that mark-to-market revaluation adjustments affecting net investment income is the primary driver for the reduction in total revenues which totaled $63.5 million for the six months ended June 30, 2020 compared to $90.9 million in the prior year.
Gross premium revenues through June 30, 2020 were down $4.2 million as new business and renewal premiums were challenged by the effects of the ongoing pandemic.
Net premium revenues through June 30, 2020 totaled $53.5 million compared to $58.5 million for the same period in 2019.
The company noted that the decrease in revenues was offset slightly by a reduction in claims experience with net policyholder benefits totaling $39.1 million for the six months ended June 30, 2020 compared to $44.2 million in the prior year.
Additionally, offsetting the impact of the negative investment returns is a reduction of provisions for future policyholder benefits totaling $7.0 million compared to an increase in actuarial reserves in the prior year totaling $12.1 million.
The mark-to-market adjustments reflected in the income statement and revaluation reserve have affected the investment securities balance at June 30, 2020 which totals $434.8 million, a decrease from $445.8 million at December 31, 2019.
Total assets at June 30, 2020 were $778.2 million with invested assets remaining the largest component of total assets comprising 78.1 percent of total assets.
On July 13, 2020, the Company held its Annual General Meeting where the shareholders ratified the Board of Directors’ approval for the payment of a $0.16 dividend per share totaling $3.9 million to the Class “A” ordinary shareholders in respect of the Company’s 2019 performance.
This dividend along with Class “A” preference dividend distributions in respect of Q1 and Q2 are reflected in shareholders’ equity.
“Prior to any consideration of dividend distributions, we carefully assess the Company’s capital position,” said Hilts.
“We remain focused on ensuring that the Company’s capital base remains sufficiently strong to meet future obligations to its policyholders and shareholders.”
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