Deadly storm could trigger insurance rate hikes

Deadly storm could trigger insurance rate hikes

Having battered a number of Caribbean countries and the US state of Florida, leaving behind in the region nearly 30 deaths and hundreds of millions of dollars in damage, Hurricane Irma is likely to inflict some more pain, but of a different kind, on Barbados and the rest of the region.

A leading insurance official is hinting at possible rises in property insurance rates due to the carnage caused by the killer storm, particularly in Anguilla, Barbuda, the British Virgin Islands and the Franco-Dutch island of Saint Martin.

Speaking even before Irma dealt its final blow to the Caribbean as a category five cyclone, before heading to Florida as a category four storm, flooding streets, spawning tornadoes, and knocking out power to millions of people, President of the General Insurance Association of Barbados Michael Holder left no doubt what was likely to happen should insurance companies have to dish out large sums in compensation.

“I know for a fact, for Bahamas they have already stated that if they are impacted by Irma they estimate that their rates can increase something like 20 to 25 per cent next year. So that is the kind of eventuality you can have coming out of this type of thing,” Holder told Barbados TODAY.

The Bahamas escaped major damage and the Lynden Pindling International Airport reopened today, while the Nassau Port reopened yesterday, although cruise ships are not expected to begin docking there before Wednesday.

Barbados also escaped Irma’s fury, the storm causing no more than high sea swells, and from 200 miles away, knowcking off the roof of the home of 68-year-old Patsy Trotman of St David’s Village, Christ Church.

This notwithstanding, Holder said Barbadians may have to pay for the suffering of its neighbours.

“Generally you find that even though Barbados may not have been impacted, the region was impacted, and the region may use the same reinsurers. So ultimately what can happen, not that necessarily it will happen, but what can happen is that you can find that depending on the amount of insured losses that has taken place – because we need to be mindful of what transpired with Harvey and Texas and we would obviously know what happen with Irma and Barbuda, Tortola and whoever else in the path – and a combined result of that, depending on the number of insured losses, you can see that reinsurers may say to us next year, ‘well guys, your property rates may have to be adjusted upwards somewhat’.

“It is not something that is definite but it is a possibility depending on the net result of the total insured claims coming out of the systems,” the insurance official explained.

With several countries sill assessing the damage caused by the monstrous storm, Holder said it was difficult to estimate how much insurance companies would be forced to pay out in compensation.

He said the assessment could go one for some time and it could be weeks, and possibly months, before a determination was made as to the total pay out, adding that losses could be greater than the amount for which storm victims were insured.

In 2010 Barbados had a brush with Tropical Storm Tomas, which resulted in just over 1,700 property claims and a payout of about $28 million from the insurance industry.

Holder told Barbados TODAY that while there were some “slight adjustments” then, compensation payments were not significant enough to force the industry to increase premiums.

“So I think we can appreciate that with a direct impact from a system the quantum of claim payments that probably would have to be made,” he said.

Antigua’s sister island Barbuda was the first island to suffer a direct hit from Hurricane Irma, and the prime minister, Gaston Browne, said 90 per cent of homes were destroyed by the superstorm.

The expense of rebuilding houses alone is expected to top US$59 million. It was not immediately clear how many of the homes were insured.    

marlonmadden@barbadostoday.bb

17 Responses to Deadly storm could trigger insurance rate hikes

  1. Jennifer September 12, 2017 at 6:50 am

    No surprise here. This is the type of $hyte we have to go through, held in these fetters. Like if lay people control the weather. When wanna collecting for years with low claims you do not give back.

    Reply
  2. harry turnover September 12, 2017 at 7:06 am

    Well said Jenny in those years when the Hurricane season was quiet the rates were not reduced the following year.
    The thing is that when the rates are increased they are going to remain whether the next season is active or not and will be increased again when they have to pay out.

    Reply
  3. ks September 12, 2017 at 8:27 am

    You guys just can’t wait…… Folks.. this is just a ‘warning’, so beware it is coming…. just like the recent fuel increase which we felt just days after Harvey interrupted the refineries in Texas …. any excuse they will pounce on to squeeze out more money, as if the Government ain’t squeeze out all already!

    Who wants to bet that the fuel prices don’t come back down when the Texas refineries back up & working? LOL!!!

    Reply
  4. Shervonne Cash September 12, 2017 at 8:27 am

    Why increase insurance premium. I would think it would be fair to waive for damage homes and reduce for a specific time. Utter Greed!

    Reply
  5. Alex Alleyne September 12, 2017 at 9:19 am

    The dust ain’t settle yet and he out of the blocks talking about rate hike.

    Reply
    • Jennifer September 12, 2017 at 9:41 am

      And god forbid another hurricane past. We canned. This is what happens when that oppressor is at the help. He don’t know when to stop being greedy. No humanitarian/conscience.

      Reply
  6. Milli Watt September 12, 2017 at 9:31 am

    took him long enough…………….hmmmmm let’s see, say an increase of NSRL 10% across the board

    Reply
  7. Kearn Williams
    Kearn Williams September 12, 2017 at 9:43 am

    There doesn’t have to be a stom to have rocketing insurance rates

    Reply
  8. MArk Anthony
    MArk Anthony September 12, 2017 at 10:50 am

    Of course insurance companies in islands not affected by the hurricanes will increase their rates . Insurance is a legal scam.

    Reply
  9. Miguel Carlos Jose Humphrey
    Miguel Carlos Jose Humphrey September 12, 2017 at 12:03 pm

    Don’t wait !! Raise them by 25-60%…Go ahead stop talking and do it now…quick before someone actually does something to stop it.

    Then watch everyone stop paying for insurance and chaos ensues….cause you can’t even afford to buy groceries or pay a light bill in this country without selling a kidney.

    Maybe then Bajans will actually get off their ass and do something besides march.

    Reply
  10. Mark Rosmar September 12, 2017 at 12:16 pm

    This insurance guy really knows how to talk himself (customers actually) into a crisis!

    Reply
  11. Shawn Phillips
    Shawn Phillips September 12, 2017 at 1:16 pm

    You late,I was listening for that even before Irma did any damage
    CRIMINAL

    Reply
  12. Alison Branch
    Alison Branch September 12, 2017 at 1:38 pm

    Big long stupse!

    Reply
  13. Ziggy Blessed
    Ziggy Blessed September 12, 2017 at 3:05 pm

    Wicked

    Reply
  14. Buun September 12, 2017 at 4:38 pm

    Go tell it to the Devil!

    Reply
  15. Carol Grant Cumberbatch
    Carol Grant Cumberbatch September 12, 2017 at 5:47 pm

    Pack of wicked people.

    Reply
  16. Alex Alleyne September 12, 2017 at 6:07 pm

    Sad thing about it is , he nor none of his buddies ever send you a “thank you Card” for not having a claim for 10 years or more.
    HARTLESS bunch.

    Reply

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