Wednesday, September 11, 2019
By YOURI KEMP
Bahamian insurers yesterday warned that up to three-quarters of property owners in the areas Dorian hit hardest may be unable to gain full compensation for their losses.
Members of the Bahamas Insurance Association (BIA), addressing Dorian's implications, highlighted the significant financial burden that may be imposed on the government and Bahamian taxpayers to finance rebuilding by suggesting that between 40-50 percent of impacted homes and businesses may be totally uninsured.
Timothy Ingraham, Summit Insurance Company's president, responding to a question from Tribune Business, said "anywhere from 40 percent to 50 percent of the persons in the affected areas are uninsured, and some 75 percent are underinsured".
Bahamian insurers have frequently warned their clients to review the sums insured on their homeowners and personal contents policies, especially those who had purchased their properties before VAT's introduction on New Year's Day 2015, as the tax's arrival may have resulted in their assets becoming under-insured.
Meanwhile, BIA members yesterday confirmed initial estimates that Dorian claims payouts could set an unwanted Bahamian record by coming in at over $500m, and warned that property and casualty premiums will likely increase to enable underwriters to recover the costs associated with Hurricane Dorian.
Patrick Ward, chief executive and president of Bahamas First, said "without question premiums would go up" as a result of Dorian-inflicted damage.
He added that "monies have been pouring in from reinsurers in the millions" to help satisfy hurricane claims, which he said could reach well into the $500m range - some $100m more than the payout for Hurricane Matthew last year.
Mr Ward conceded that the "$500m estimate is a conservative estimate, and that the overall dollar amount at the end of the day could be much more than that". He added that the BIA is basing its estimates on previous experience with processing $400m of claims from Hurricane Matthew, making the $500m mark a good starting number.
Warren Rolle, the BIA's chairman, said the reinsurance programmes employed by Bahamian general insurers are very robust and there was no concern over the industry's ability to satisfy claims.
He added that it was "important for customers to understand their insurance policy, and to check with their local insurance providers before going outside of The Bahamas to reinsurers to negotiate their claims".
Mr Rolle also warned that customers should first "know and understand the overall costs associated with negotiating their claims, especially the people who go outside of their local insurance provider", as this would increase their costs.
The BIA chief reiterated there was "no reason for concern over the latest A. M. Best international insurance credit rating agency report", as it was "standard practice" for it to give periodic reviews on insurance companies in The Bahamas.
Mr Ingraham added that loss adjusters were currently on the ground in Grand Bahama, and set to issue a damage assessment report any day now. He stressed that Dorian-related claims will start to be paid today.
L-R were Patrick Ward, president, Bahamas First; Glen Ritchie, president, Family Guardian; Warren Rolle, BIA chairman; Timothy Ingraham, president, Summit Insurance.