By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Exploratory talks are being held to develop an insurance structure that will provide at least partial cover for Family Island businesses against another Joaquin-type storm.

Roderick Simms, head of the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) Family Island division, confirmed it was in discussions with the Bahamian insurance industry over providing widespread protection against future natural disasters.

He told Tribune Business that “the majority” of storm-ravaged businesses in the islands hardest hit by Joaquin did not have any insurance coverage, arguing that it was too ‘cost prohibitive to purchase.

“We’re looking at some form of insurance structure, looking at what products we can offer to at least provide partial coverage for those businesses,” Mr Simms said.

“Insurance is already pretty expensive on the islands, and we are looking at that and how best we can come up with a product that can best address the situation.”

Relatively low levels of insurance penetration on the most affected islands - Long Island, San Salvador, Crooked Island, Acklins and Rum Cay - have meant a prolonged recovery for most businesses and communities hit by Joaquin.

The industry’s ‘rule of thumb’ is that the further south persons travel from Nassau, the lower the level of insurance penetration and coverage.

With fewer ‘risks’ in these islands, property and casualty premiums tend to be more expensive that in Nassau, Grand Bahama or Abaco. And underwriters are sometimes reluctant to write business in the Family Islands, fearing that construction quality may be sub-standard.

“The majority of them didn’t have insurance,” Mr Simms said of the near-150 businesses that the Chamber identified as having been damaged by Joaquin.

“The number one complaint we heard from them was it was just too costly. Operating on the Family Islands is costly in itself, so when you factor in insurance, it’s just so much.”

Mr Simms added, though, that it was essential for some form of insurance solution to be found - and provided for - Family Island businesses so that they were better positioned to recover from future catastrophic events.

“We don’t want to return to the situation that we had, which caused us to be where we are now,” he told Tribune Business, “If we have situations like that in the future, at least there’s some level of assistance that can be provided.”

Mr Simms said Rebuild Bahamas, the Chamber’s Joaquin relief partnership with the Rotary clubs, was asking businesses who received funding to “seek out” insurance coverage on their own first.

Edison Sumner, the Chamber’s chief executive, floated the idea of the Rebuild Bahamas Foundation helping to pay the insurance deductible for Family Island businesses in the aftermath of future storms.

“That is futuristic,” he acknowledged. “We’re going to try in discussions with the insurance industry to have as many of these homes and businesses in the Family Islands covered.”

Suggesting that these islands might require special “consideration”, Mr Sumner added: “We see this [insurance] as one of those things that has become essential, and for residents throughout the country to ensure they have adequate insurance so losses can be mitigated.”

Recalling his impressions of Joaquin’s immediate aftermath, Mr Simms told Tribune Business: “In travelling through the islands, the impact on the ground after Joaquin was enormous.

“I’d never seen anything like that before. Roofs were torn off, debris was all over the island. The impact was significant to the business community in lost inventories, and the effect on their establishments.

“They were unable to conduct business. There was a brief pause to the conduct of business until they returned to some form of normalcy.”