Colina Holdings Bahamas Limited (CHBL) ended 2011 in a "strong financial position", with the company reporting a net income of $5.6 million and $550 million on its balance sheet at the year's end.

In a press release issued last night, the company noted that financial results released by the board of directors of CHBL reveal that the company ended 2011 with "considerable financial strength" and remains"in solid fiscal standing"despite the current economic challenges and the"extraordinary impact"of the reduction in the Bahamian prime rate.

In its statement, CHBL said its net income was affected by decreased individual life sales volumes in 2011 relative to the company's banner year in 2010, as the continued effects of the depressed economic environment reduced discretionary income for a number of clients.

In spite of this, the company achieved a net income of$5.6 million at December 31, 2011. Total comprehensive income was similarly moderated, closing at $5.9 million.

Total equity stood at $119.7 million and exceeded solvency requirements set out in the Insurance (General) Regulations, 2010, which CHBL said is a testament to its conservative investment strategy and balance sheet management.

CHBL's balance sheet continues to be a distinctive advantage, exceeding half a billion dollars for the first time in 2010 and growing to$550 million at the end of 2011, the company added.

The majority of this asset growth was as a result of the company's strategy to direct investment funds towards fixed income securities during the year. The focus on fixed income securities has resulted in an overall increase in net investment income, as returns over these security instruments were significantly less volatile than returns experienced in equities over 2011.

"Results reflected positive growth in key financial indicators including net income, shareholder equity and gross revenue for the first three months of the year," said CHBL Chairman Terence Hilts. "Second quarter results for the company were notably impacted by a reduction in the Bahamian prime rate, which required long-term insurers like Colina to increase its actuarial reserves to support future policy benefits.

"Given the expected significance of these reserve changes, Colina's actuaries and consulting actuaries worked closely to assess the impact of the change and reflected the effects of the prime rate adjustment within the company's second quarter financial statements, which resulted in reduced total net income and investment earnings at the close of the first half of the year. However, the company was in the unique position to withstand these changes in the economic landscape, providing fully for this extraordinary change in actuarial reserves in its second quarter results and sustaining profitability through the third and fourth quarters.

"Colina's strong capital reserve base and diversified product mix provided the company the flexibility to implement a number of mitigating measures, to compensate for the changes in the policyholder reserves to withstand fluctuations in net income," Hilts said.

Gross premium revenues were generally flat against prior year, totaling $132.1 million for the 12 months ended December 31, 2011 compared to $131.8 million in 2010, the company said.

General and administrative expenses remained at approximately 22.5 percent of gross premium revenues, reflecting management's careful actions to ensure that expenditure remains focused on those activities considered necessary to provide the level of service that its policyholders have come to anticipate.

"While not unmindful of the challenging economic times we are operating in, the board remains confident that the company will be able to meet the challenges and opportunities of the coming year," said Hilts. "The company's strategy to further leverage its position as the largest provider of life and health insurance and related financial planning products in The Bahamas, with a view to expansion outside these borders, provides it with a clear avenue to deliver sustained, profitable growth. I am confident that management has the skills, energy and ambition to capitalize on the many growth opportunities that lie before the company," he noted.

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