Caribbean Insurers Could Hike Premiums By 20% Following Hurricane Ivan

by Amanda Banks, Tax-News.com, London

07 January 2005

It has emerged that insurance premiums throughout the English-speaking jurisdictions of the Caribbean may rise as much as 20% in the wake of the destruction wrought by Hurricane Ivan last year.

This is according to Gregory Hadeed, Vice President of the Association of Trinidad and Tobago Insurance Companies, who spoke to Cayman Net News.

The cumulative total of the claims arising from hurricane damage, in addition to claims for other events such as earthquake, flood and fire damage, is thought to be around US$5.7 billion for the region’s insurers, and this is likely to mean annual premiums rising between 15% to 20%, Hadeed stated.

Meanwhile, ratings agency A.M. Best has also downgraded the financial strength rating of the Cayman General Insurance company, primarily due to the magnitude of the destruction caused by Ivan, which it said is likely to have an adverse impact on the firm’s risk-adjusted capital position and erode its capital base.

Last month, the Cayman Islands Monetary Authority (CIMA) announced that it is to undertake a review of the jurisdiction’s domestic insurance market to examine issues of underinsurance that have surfaced since the passing of Ivan.

The Authority will perform the review, in conjunction with the private sector, commencing mid-2005, when both parties will have a fuller picture of the impact of the hurricane.

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