The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas First’s president yesterday estimated that Hurricane Sandy would generate $30-$35 million in total insured losses for the Bahamian property and casualty market, with both his company - and the overall industry - looking at sums equivalent to “50-60 per cent” of Irene levels.

Patrick Ward, who is also Bahamas First’s president, told Tribune Business that the underwriter - which has the largest risk portfolio in the Bahamian general insurance market, by both size and geographical distribution - was currently estimating it would incur insured losses of around $15 million.

That sum would be around 50 per cent of the $28-$30 million worth of total insured claims submitted to Bahamas First in the wake of Hurricane Irene, although Mr Ward said the “one caveat” was whether more claims would be filed by second homeowners.

And, echoing other Bahamian general insurers, Mr Ward said he did “not anticipate” an increase in property and casualty premium prices paid by local consumers for 2013.

This, he added, was due to the storm’s US impact not being large enough to dislocate the reinsurance market.

“At this point, our feeling is that we’re looking at a loss that will fall in the range of 50-60 per cent of Irene,” Mr Ward told Tribune Business.

“Without being precise, our feeling is that the market loss will be 50-60 per cent of claims paid in that Irene period.

“We’re looking at losses in the range of $30-$35 million from an overall market standpoint.”

Mr Ward said the same percentage applied to Bahamas First’s Sandy losses in comparison to Hurricane Irene. He added that the carrier was looking at total insured losses being “in the range of $15 million”.

“The one caveat we need to bear in mind is that there are a number of second home owners that have not filed a claim,” the Bahamas First chief told Tribune Business.

“If it turns out there are some damages to that segment of the market, it could change, but everything we’ve looked at points to 50-60 per cent of Irene losses.”

Mr Ward said Bahamas First had received around 300 insurance claims to date from Sandy, a number he expected to further increase. However, it is well below the 1,000 received from Irene in 2011.

Asked what impact there would be on reinsurance costs, as a result of Sandy’s strike on the US east coast, Mr Ward said: “The early indications are that the loss is not going to be significant enough to be a market moving loss. This means the prices for next year’s reinsurance round are not going to be dramatically affected by Sandy.”

While business interruption claims could alter that assessment, as they were still being tallied and could drag into 2013, Mr Ward told Tribune Business: “The message to Bahamian consumers is that we do not anticipate Sandy will have a price uptick impact on the Bahamas to the extent it could have if Sandy had been a major impact for the US.”

While Bahamas First was always likely to incur the majority of Sandy claims, given that it has the largest risk portfolio in the Bahamian market, and with the widest geographical spread, other general underwriters were reporting minimal impact.

Terence Rollins, Security & General’s general manager, said: “As far as we’re concerned, we’re going to be even less affected than I thought we were a week ago.

“For us it’s been really negligible, half-a-dozen vehicles damaged, mostly at Grand Bahama Airport, and we have 12-14 property claims.”

Mr Rollins said most of those property claims were likely to fall below the property deductible level. As a result, while Security & General’s gross claims were likely to total around $350,000, once reinsurance kicked in the company’s share would “be under $100,000” or a five-figure sum.

And Tom Duff, Insurance Company of the Bahamas’ (ICB) general manager, told Tribune Business he was staying with previous estimates that the carrier would incur claimed losses “up to 50 per cent” of Hurricane Irene levels.

“If anything, it will be slightly less than that,” he said. “Claims numbers are settling down. We probably have 90-95 per cent of claims reported. We haven’t seen much activity in the last two days.”

Mr Duff said $3 million in total insured claims was at “the top end” of ICB’s estimates.