The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

JS Johnson's underwriting affiliate suffered just a $105,787 net loss for 2020 despite incurring more than $220m in insurance claims, it was revealed yesterday.

The BISX-listed broker and agent, unveiling its results for the full-year and fourth quarter, said its reinsurance programme had minimised the losses sustained by Insurance Company of The Bahamas (ICB) due to the Category Five storm.

ICB is the carrier through which JS Johnson places much of its property and casualty business. Alister McKellar, its managing director, told shareholders: "Given the scale of Dorian, we are fortunate to have only suffered a net loss of $105,787 in our underwriting division.

"This accomplishment speaks volumes of the quality and financial strength of our reinsurance programme, which stood behind the more than $220m of gross claims recorded by ICB. [It is] still a meaningful change to the $1.457m in profit earned the year prior."the

Bahamian property and casualty insurers buy huge quantities of reinsurance on an annual basis as their capital bases are simply not sufficient to cover the billions of dollars' worth of assets domiciled in this nation. They typically take only a small portion of the risk on to their books, with reinsurers covering the bulk of this exposure.

JS Johnson's total net income dropped by 8.9 percent year-over-year to $6.44m, compared to $7.067m the prior year, due to Dorian's impact on ICB's figures. However, the agency and brokerage business produced positive gains despite the devastation inflicted upon Grand Bahama and Abaco.

"In contrast, our agency division enjoyed another successful year," Mr McKellar said. "Total income grew a healthy 13 percent from $19.646 to $22.111m, the highest growth in several years, spurred on by the continued economic recovery throughout the majority of our islands.

"This trend is expected to continue into 2020 with the inflow of foreign exchange and investment. Despite expenses increasing 11 percent, overall profitability rose 17 percent from $5.611m to $6.546m."

ICB's gross claims are in line with those for the overall Bahamian property and casualty industry, with the total expected to be towards the upper end of the $1.5bn to $2bn range.

Anton Saunders, RoyalStar Assurance's managing director, previously revealed that the carrier and its reinsurance partners have set aside a $325m "gross reserve" to deal with some 1,800 Dorian-related claims.

"The $2bn [collective industry claims payout] for Dorian is holding firm. You can forget the $1.5bn," he said.