News
Financial provider grows its earnings 25% since takeover
25 February 2010
Financial Provider grows its earning 25% since take over.
By NEIL HARTNELL
Tribune Business Editor
A LEADING Bahamian financial services provider yesterday said it had grown earnings across all business segments by an average of 25 per cent over the past three years following its management-led buyout, compared to the results achieved over the previous three-five years.
Chester Cooper, president and chief executive of BAF Financial & Insurance (Bahamas), the former British American Financial, said that while the company had not been "spared" by the economic downturn, it had cut expenses "fairly significantly" by 10 per cent in 2009, with life insurance premiums bucking the recession by growing "just under 10 per cent" year-over-year.
Fresh from celebrating the third anniversary of BAF's ownership change, which was completed in February 2007, Mr Cooper told Tribune Business that BAF had enjoyed "an average growth rate in trms of earnings across all sectors by about 25 per cent when we compare it to the previous three to five years [pre-takeover]".
He added: "The growth has been significant, in my view. The Cayman operation alone increased the assets of the group by 20 per cent, and over and beyond that we've had steady growth in premiums and in terms of new clients and services. That's been encouraging."
BAF last year acquired both British American Insurance Company (BAICO) Cayman and CLICO's life insurance business in that nation, enabling the 100 per cent Bahamian-owned company to both expand into the Caribbean - a long-stated goal - and benefit from the collapse of Trinidadian-headquartered financial conglomerate, CL Financial.
Mr Cooper yesterday disclosed that BAF was assessing potential further expansion into the Caribbean, adding: "We will continue to search for the right opportunities, and are in discussions with one territory for future expansion. I don't know how quickly that will materialise and become a deal, but those discussions are ongoing."
Describing 2009 as "an extremely challenging year", Mr Cooper said BAF had "seen growth in premium of 10 per cent" in its ordinary life insurance business during 2009. This compensated for a "slight decline" in its home service business, a sector featuring many hotel workers impacted by the recession, with BAF's combined life insurance premium revenue increasing by "just under 10 per cent" year-over-year.
BAF, Mr Cooper added, was continuing to work with its clients, having experienced a "marginal increase" in mortgage delinquencies during 2009.
"Overall, I think we've done fairly well, notwithstanding the economy," Mr Cooper told Tribune Business. "We've been very successful in making this business more efficient, and have cut expenses fairly significantly. We've cut expenses by 10 per cent, and have done so without any mass lay-offs."
BAF had "pretty much completed" the installation of the new technology platform that was introduced when Mr Cooper and his fellow investors acquired the company, leaving it "substantially positioned for any upside in the market".
Elsewhere, the BAF president and chief executive said the company's alliance with BUPA, which will provide reinsurance and give Bahamian clients access to a worldwide network of providers and physicians, would enable its MedSafe health insurance product line to "tap into the market fairly significantly".
Individual health clients will be the initial target, and Mr Cooper added: "The interest has been tremendous. We're up and running and ready to go."
Elsewhere, BAF's Symphony package of financial products targeting young Bahamian professionals - chiefly those college graduates - had been "significantly successful", bundling together mortgages, life and health insurance.
However, Mr Cooper said the "significant growth" in this business line slowed in 2009, primarily due to the economy and employment concerns. There was also no major growth in BAF's financial services and pensions business during 2009, something he attributed to both the economy and fall-out from CLICO (Bahamas) collapse, which impacted overall market confidence.
Mr Cooper said the BAF branding was chosen as a way to both create a unique identity for the company, with one eye on regional expansion, and disassociate itself from the British American name that had received "bad press" as a result of CL Financial's unconnected failings. In addition, the BAF brand maintained the company's links with its 90-year heritage.
Asked why the new ownership's first three years had gone relatively well, Mr Cooper said: "It's been building on the legacy that was already established. We did not kill the goose that laid the golden egg or set out to reinvent the wheel; we wanted to build around the solid core of mature business."
