The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A major Bahamian insurance company has revealed it almost fell victim to computer hackers “during the height” of the COVID-19 pandemic’s lockdown.

Bahamas First, the property and casualty underwriter, revealed in its just-released 2019 annual report that it managed to “prevent the complete shutdown” of its information technology (IT) system when intruders attempted to penetrate it.

It reassured thousands of Bahamian insurance customers that no private financial information or personal details were obtained by the hackers, adding that the episode illustrated how the increasing post-COVID-19 reliance on technology and IT systems will need to be matched by cyber security upgrades.

Noting it had invested heavily in developing its digital platform for delivering products and services in both The Bahamas and the Cayman Islands, Bahamas First told its shareholders: “The issues that have emerged in the aftermath of the COVID-19 spread, and the operational complexities for businesses such as ours, have highlighted the need for this investment.

“Ironically, as we adjust our business practices to accommodate more remote transactions and working capabilities, it has also highlighted the need to heighten our awareness and investment in cyber security.”

The insurer added: “We experienced first-hand the unauthorised intrusion into our network by an outside source during the height of the lockdown period in The Bahamas but, fortunately, we were able to prevent the complete shutdown of our business and, just as importantly, protect clients’ personal information and sensitive data.

“The world as we know it has fundamentally changed in recent times, but with every challenge comes an opportunity, and we shall do our best to explore the ones within our reach.”

Bahamas First Holdings, the group’s parent company, suffered a more than $11.5m year-over-year bottom line reversal for the 12 months to end-December 2019 as Hurricane Dorian turned the prior year’s $9.277m profit into a $2.376m total comprehensive loss.

Net losses stood at $5.08m, but a $1.95m gain on the value of its land and buildings, coupled with a $799,433 increase in the value of its securities and other investments holdings, helped to cut the former figure by more t than half tom produce the comprehensive bottom line result.

Bahamas First’s annual report revealed that it incurred some 2,250 claims, worth more than $300m in gross settlement payouts, as a result of the Category Five storm’s direct strike on Abaco and Grand Bahama. The bulk of these losses will have been picked up by the Bahamian underwriter’s international reinsurance partners.

“The vast majority of these claims were property related, both in the homeowners and the commercial or business segments, accounting for 75 percent of the total dollar value of claims. Grand Bahama and Abaco account, collectively, for 95 percent of the claims incurred. Thankfully, we have been able to successfully settle and close over 90 percent of the reported claims from all locations,” Bahamas First said.

Patrick Ward, Bahamas First’s president and chief executive, told shareholders: “The net claims for the group increased dramatically to $39.9m in 2019, an increase of 43.5 percent compared to the prior year total of $27.8m. The majority of this increase is attributable to Hurricane Dorian, which is the largest ever natural catastrophe event to impact The Bahamas.

“The losses directly related to Dorian have overshadowed the fact that the underlying portfolios of business in both the health and property and casualty segments performed very well in 2019, and this is obviously very promising for the future results of the group.

“The combined ratio for 2019 was 108.1 percent, which is directly related to the hurricane’s impact and, not withstanding the fact that we incurred considerably more administrative costs in dealing with client service requirements, we were able to contain the expense ratio to 39 percent, compared to 38.1 percent in 2018.”

Alison Treco, Bahamas First Holdings’ chairman, added that the company’s previous expectation of a small 2019 profit or break-even position had been thwarted by a $1.7m reduction in commissions from reinsurers.

She wrote to shareholders: “In my previous communications to you following Dorian, I expressed the hope that our bottom line result would reflect a small profit or at the very least a break-even position for 2019. The final result of a total comprehensive loss of $2.4m was partially due to a higher than expected reduction in commissions from reinsurers on our main lines of business, amounting to $1.7m.

“In a year when the financial results of your company have been adversely impacted by Hurricane Dorian, a positive note is that we were able to grow the revenue for the group in gross premium to $161m from $155m in 2018. Having this level of scale in the current environment will prove to be beneficial to us in the coming months.”