The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian insurer yesterday said it will be paying out “in excess of $90 million” in Hurricane Matthew-related claims on behalf of itself and network partners, with 65 per cent already settled.

Anton Saunders, RoyalStar Assurance’s managing director, told Tribune Business that the property and casualty underwriter should have settled all residential/homeowner claims by early 2017.

Emphasising that the carrier was trying to resolve as many of its 1,600 claims as possible before the Christmas season, Mr Saunders said the overall industry was still holding to its original estimate of $400 million in total gross insured losses from Matthew.

“We have received 1,600 claims, and we have settled at least 65 per cent of those,” he told Tribune Business.

“Most of the residential and homeowner claims should be completed by early next year. Some of the commercial claims will take a bit longer because they are more complex.

“All the insurance industry is at the same level. We are trying to ensure we settle as many claims as we can before the holidays. We’ll be finished with 99 per cent of the residential claims by the end of the year; no if’s, but’s and maybe’s.”

Mr Saunders confirmed that Hurricane Matthew had produced record insured losses for the Bahamian property and casualty industry, due to both its strength as a Category Three/Four storm, and the fact it hit the two main population centres - New Providence and Grand Bahama - where there is the greatest concentration of risk.

He added that RoyalStar’s gross Matthew payout also included the global insurance industry players that it represented, and acted for, in the Bahamas.

“We do have a lot of network partnership business with some of the big global companies around here,” the RoyalStar chief told Tribune Business.

“If we include the network partnership business and those type of risks, we are going to pay out in excess of $90 million.”

As for the industry as a whole post-Matthew, Mr Saunders added: “The reserves are holding for our gross amount. The market said about $400 million, and that is still holding.”

The size of RoyalStar’s $90 million payout, “network partnership” business included, shows the extent of the damage Matthew inflicted on New Providence, Grand Bahama, Andros and the Berry Islands.

However, given Matthew’s 130-150 mile per hour winds, Mr Saunders said the damage on New Providence was not as great as initially feared by Bahamian property and casualty insurers.

“When you analyse a Category Four hurricane, I think we all thought it would be worse than it eventually was in New Providence,” he said.

“On New Providence, all of us were pleasantly surprised that a Category Four was not as bad as for other islands from an insurance standpoint. We got lucky in Nassau insurance-wise; it was not as bad as first thought.”

Mr Saunders, though, said the amount of damage and insured losses in Freeport was consistent with industry projections for a storm of Matthew’s magnitude.

He added that the insurance industry needed “to be focused” on several issues in the storm’s wake, especially non-insurance or under-insurance, and consumer understanding of deductibles.

“There is a big problem in the country with no insurance, and there’s just as big a problem with under-insurance,” Mr Saunders told Tribune Business.

“People have not heeded their agent’s advice on increasing the sums insured when premiums are low. We understand there’s a trade-off between affordability and insurance, but we have to achieve a better balance there.”

Mr Saunders explained that if homeowners added an extension or extra level to their property, but did not increase the sum insured, they would be “hit with the average clause” when submitting a claim, resulting in a lower payout.

And, given the increasing risk/damage posed by storm surges and flooding, the RoyalStar principal said properties located on the coast would likely incur higher premiums than those based more inland.

“We all have to do a better job in explaining the deductible and what it means, so there’s not a great shock to clients when there is a claim and they decide this is the first time they’ve heard of a deductible,” Mr Saunders said.

“It’s for us and the agent to have more public education so the understanding of that deductible can be explained more and more. The client also has to take some responsibility, interest in their policies so they know what they are covered for.”