With yet another active hurricane season looming, Bahamas Insurance Association (BIA) Chairman Anton Sealy said the level of premiums across the industry has been maintained among those who already have home insurance, but the sector has not seen an uptick in new policies over the past year, despite the high susceptibility of property damage for Bahamian homeowners.
“Not really, not to the extent that we would like to see. I think possibly that could be attributed to the pandemic, in that a lot of people have found themselves either furloughed or in some cases without jobs for the period, so financially they are unable to afford it and insurance being an intangible product, it’s one of the first things that people tend to let go when they are able to do so,” he said in an interview with Guardian Business yesterday.
“So the insurance take up, we haven’t seen an uptick in that following Dorian and that could be in some cases contributed to the pandemic and people having lost jobs and the decrease and decline in their income.”
Following Hurricane Dorian, which caused an estimated $3.5 billion in structural damage, in September 2019, the government and international bodies like the International Monetary Fund (IMF) highlighted the need for Bahamians to prioritize insurance among property owners, including the possibility of mandatory hurricane insurance.
It was estimated that 80 percent of the houses in Marsh Harbour, Abaco – one of the areas hardest hit by Dorian – were not insured or underinsured.
In policy recommendations to the government this year, the IMF reiterated that steps should be taken to enhance resilience to natural disasters by putting in place mandatory hurricane insurance.
Sealy said he doesn’t believe that is a feasible policy the government can implement at this time.
“My personal opinion – and I haven’t really had an extensive conversation with my colleagues in the industry – is I don’t see that happening in the short term at all. I think when you try to legislate that kind of behavior it is very difficult. I just don’t think it can work in the short term,” he said.
“I think the government, what they can do is offer and give some sort of incentive for people to insure their homes, such as a break on real property tax or some other incentive for people to insure their homes, knowing that it ultimately helps them and the government, because if something happens to a home, rather than having to dig into the public treasury to assist people in rebuilding the insurance companies will do that for them.
“So in the long term, it will benefit the government, but I don’t think it’s something they can legislate or should legislate at this moment. I think they can incentivize homeowners to insure their properties adequately and the government can take the lead by ensuring all of its assets are insured as well.”
The Insurance Commission of The Bahamas revealed in its annual plan last month that insurers have paid $1.8 billion in claims – which totaled more than 14,000 as of September 2020 – from reported losses following Hurricane Dorian. Losses were estimated at $2.1 billion.
Sealy said while the COVID-19 pandemic has slowed some growth in the sector, insurance companies have done their best to ensure policy holders maintain their coverage.
“When you talk about those people who traditionally have had full coverage insurance, they were able to maintain their coverage; however, the insurance companies had to be quite flexible in payment terms,” he said.
“In other words, we’ve allowed them in a lot of instances to finance their premiums, that is pay it over a period of time. So they have maintained their coverage, but we have had to accommodate them with more flexible payment terms. So the industry has done that.”
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source https://thenassauguardian.com/slow-home-insurance-uptake-despite-looming-hurricane-season/
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