NASSAU, BAHAMAS — J.S. Johnson saw its net income for 2019 fall 12 percent as a direct result of Hurricane Dorian, as its net claims ‘more than doubled’.
Marvin Bethell, the BISX listed insurer’s chairman, acknowledged that the events of the past year have resulted in significant challenges for the company and its clients, in a statement in the company’s 2019 annual report.
“From the devastation of Hurricane Dorian to the unprecedented disruption caused by the COVID-19 pandemic, we certainly seem to have entered what is now being called the “new normal,” Bethell said.
”What this means in practical terms for both the company and society-at-large remains to be seen. No doubt some difficult times lie ahead. But it’s my sincere hope that our communities and our government will work together to effectively mitigate the most serious challenges we face until we can get on the other side of this.”
Bethell noted that company net income fell 12 percent to $6.2 million, a direct result of Hurricane Dorian’s impact.
“Net claims more than doubled to $4,785,760 and pushed our loss ratio up to 108 percent from only 38 percent the year before,” Bethell said.
“Dorian also affected events surrounding one of the most significant milestones in the company’s history, our 100 year anniversary on 3 April, 2019.
“The celebrations had begun in earnest in April, with the first of several branch events. We also placed the smiling faces of our staff on the cover of Bahamasair’s in-flight magazine, and had special commemorative video footage taken.”
He said: “But we decided to cancel anything further after the storm struck, out of respect for those affected. It was an opportunity to honour an historical achievement that was, unfortunately, cut short.”
Bethell acknowledged that the company’s agency division was “one bright spot” in an otherwise difficult financial year after posting a 13 percent growth rate in total income and a 17 percent increase in overall profitability.
The company’s stock price rose from $13.01 a share at the start of 2019 to $14.00 by the end — an increase of 7.6 percent.
By January 15, the price had reached $15.20.
Bethell said: “Dividend payouts also provided a measure of comfort for investors during the year, rising from 60 to 62 cents per share. There’s some precedent for this level of payout as well.
“For the nine years prior to 2017 the company consistently followed a dividend policy of 64 cents per year, or 16 cents per quarter. 2019’s dividend equates to a yield of 4.43 percent, still one of the highest on the Bahamas International Securities Exchange (BISX)-listed securities for the year.”
Bethell said: “There are, of course, no guarantees in relation to dividend payouts. The board must always consider all aspects of the company’s financial health before declaring a payment at all, and it’s likely that the current crisis brought upon us by the Covid-19 pandemic will impact future payouts.”
Despite the COVID-19 fall-out, Bethell noted that the pandemic has highlighted the importance of technology.
“As the government-mandated shutdown disrupted normal face-to-face customer service, we witnessed a dramatic increase in the use of our Online Service Center (OSC),” he said.
:We have been encouraging clients to sign up for this service for some time now, but have not gotten the level of response that the crisis has produced. The ability to direct clients to such a useful online site assisted us tremendously in our overall response.
Bethell said: “In that regard, the company is currently working with technology consultants to help us upgrade our current systems, add new features, and serve our clients even better.”
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