The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian insurance industry is currently pegging gross losses caused by Hurricane Joaquin at $14 million, a sum equivalent to just 23 per cent of the initial $60 million damages estimate.

Emmanuel Komolafe, the Bahamas Insurance Association’s (BIA) chairman, told Tribune Business that a regulatory assessment suggested that total sums insured in the area hit hardest by the Category Four storm came to just $80 million.

The assessment, compiled by the Insurance Commission of the Bahamas (ICB), based on data obtained from the sector, suggests that its Joaquin-related losses will be less than initial estimates.

Emphasising that the figures were still ‘a moving target’, Mr Komolafe said gross industry losses across the affected islands were estimated at $14 million based on initial figures.

Placing that into context, he added that it was equivalent to less than one-quarter of the initial $60 million damages estimate by the Government. That latter sum subsequently rose to $80 million, reducing the ‘losses covered by insurance’ ratio further - to just 17.5 per cent.

“The Government put out a figure of $60 million. Some $23 million of that is subject to local insurance coverage,” Mr Komolafe told Tribune Business, adding that it highlighted the increasingly low level of insurance protection moving south through the Bahamas.

He added that between 20-30 per cent, “25 per cent at the high-end”, of all Joaquin-related devastation would likely be covered by insurance.

“This is still kind of moving,” Mr Komolafe told Tribune Business of the numbers. “We’re trying to be very careful when we speak to these figures. It’s what we have so far, and could rise in the days ahead.”

He also emphasised that the $14 million would not be borne solely by the Bahamian insurance industry alone, with the majority absorbed by the global reinsurance market.

Bahamian property and casualty insurers have to buy huge amounts of reinsurance annually to cover the risks they take on, due to their relatively thin capital bases, thus making reinsurance the main determinant of the premium prices paid by Bahamians.

It also means that it is the reinsurers, not Bahamian property and casualty underwriters, who take the biggest hit on catastrophe-related claims in this nation.

It is the ‘net loss’, rather than the $14 million gross, that will be paid by the Bahamian industry. Tribune Business understands, but was unable to confirm, that the net loss is currently being estimated at around $5 million industry-wide.

Still, the $14 million ‘headline’ figure is far below the $25-$30 million industry-wide Joaquin loss that was initially projected by Patrick Ward, Bahamas First’s president and chief executive.

Mr Komolafe told Tribune Business that the ICB report had estimated total sums insured on the hardest-hit islands at around $80 million.

Long Island, Crooked Island, Acklins, Rum Cay and San Salvador were the islands that took a direct hit from Joaquin.

Mr Komolafe said of the $80 million, almost half of it - 48 per cent - was concentrated on Long Island. Cat Island had the second highest insurance coverage exposure, at 20 per cent, with San Salvador accounting for 10 per cent.

The remaining 22 per cent is spread across the other islands.

Mr Komolafe said the ICB assessment had received data from around 90 per cent of the industry, with 30 per cent providing updated figures that were “lower than initial estimates”.