The Tribune

By NEIL HARTNELL

Tribune Business First

BAHAMAS First Holdings, the general insurance holding entity, has yet to take "a hard and fast decision" on whether to list its ordinary shares on the Bahamas International Securities Exchange (BISX), its chief executive indicating that its shareholders' appetite for doing so may have cooled.

Patrick Ward, who is also Bahamas First Holdings' president, told Tribune Business that no firm decision on the BISX listing proposal was taken at the company's recent annual general meeting (AGM), with some of its larger and mid-ranking shareholders having indicated prior to the event that they "weren't in favour" of the move.

Mr Ward said the company did not obtain explanations from its shareholders as to why they opposed a BISX listing, adding that Bahamas First Holdings would continue obtaining investor feedback in a bid to reach "a consensus" on the issue.

"We're going to continue to poll the views of our shareholders as to whether the same level of interest that existed in the past is still there," Mr Ward told Tribune Business.

"There was no hard and fast decision taken at the AGM. Effectively, there's no timetable that's hard and fast. It's not an issue that's a critical decision for us at this stage. We don't feel it was appropriate or desirable to put a hard and fast timetable on it."

Mr Ward said Bahamas First Holdings, the parent company for underwriter Bahamas First General Insurance Company and several Bahamian insurance agencies, would continue seeking shareholder input in a bid to "get consensus to act one way or another".

However, he indicated that prior to the AGM, several "mid-sized to large" Bahamas First Holdings shareholders had expressed negative sentiments towards a BISX listing, their enthusiasm and appetite for such a move having apparently cooled.

"We did get some feedback from shareholders that they weren't in favour," Mr Ward told Tribune Business, although the reasons for this thinking were not disclosed.

Bahamas First Holdings' Board of Directors had approved the BISX listing of the company's ordinary shares, plus its five million preference shares and $15 million worth of outstanding bonds, at a February 2011 meeting. Mr Ward said earlier this year that he personally believed a listing would happen this year, if it was going to occur, although the Board was "very fluid" on the issue.

Current shareholder sentiment, though, casts doubt on whether Bahamas First Holdings, which finished 2011 with $46.64 million worth of net equity and $178.502 million in total assets, will list this year.

Still, Mr Ward said: "We effectively operate as a publicly traded company anyway. My personal view is there's some merit in listing, as it would provide a transparent pricing mechanism at some point. That's important for someone holding shares as part of their equity holdings."

He also conceded that an equity listing on BISX's main Board would prove attractive to institutional investors who currently shy away from Bahamas First Holdings because, as a non-listed stock, they are prohibited from holding its shares.

"That's another reason we should look at it favourably, as it does give us the opportunity to broaden the shareholder base," Mr Ward told Tribune Business.

In common with other general insurance companies, Bahamas First Holdings' 2011 net income was hit by a combination of Hurricane Irene and an "unprecedented" level of fire claims, these collectively causing a $6.5 million bottom line hit.

Bahamas First Holdings was able to "contain" the net $6.5 million hit, together with lost reinsurance commissions, to the income statement.

As a result, there was no impact on Bahamas First Holdings' capital at a group level, which closed 2011 at $44.5 million or $1.08 per common share, or at its property and casualty carrier, Bahamas First General Insurance Company. The latter ended the year with a capital level $6 million ahead of the minimum requirements set by the new Insurance Act and accompanying regulations.

Without those events, Bahamas First Holdings would have generated net income of around $7.5 million for 2011 if not for the 1,000 Hurricane Irene-related claims, together with losses incurred on fire claims resulting from blazes at Automotive & Industrial Distributors (AID) and the Betty K dock in downtown Nassau. The group's net underwriting income for last year was only surpassed by the $24 million it generated in 2010.

Comprehensive net income attributable to Bahamas First Holdings' owners fell to $0.5 million in 2011, compared to $3.7 million in 2010, with consolidated net income per share down from $0.10 to $0.01. Gross written premiums only fell by 1 per cent to $152 million, while trade accounts receivables declined from $33.7 million in 2010 to $27 million last year.

Year-over-year its combined ratio increased from 98 per cent to 103 per cent, while the group's expense ratio fell from 37 per cent to 33 per cent.