The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has likely suffered a “minimum” $30 million loss as a result of the heavy flooding that hit New Providence last month, a top insurer has estimated.

Patrick Ward, Bahamas First’s president and chief executive, told Tribune Business the event should act as a ‘wake-up call’ for the country, estimating that total insurance industry losses would be “in excess of $10 million”.

This means that $20 million in uninsured damage was done to southern and eastern New Providence by the more than-15 inches of rain that fell within hours on Tuesday, May 21.

The latter sum will have to be covered by the pockets of those affected, mostly middle and low income homeowners and tenants whose apartments, homes, possessions and vehicles were flooded by the torrential rain.

“I think it is going to be a sizeable loss in the market, not as high as Sandy was last year, but it’s still going to be a sizeable claim,” Mr Ward said of the flooding’s impact on Bahamian property and casualty insurers.

“The insured losses are probably going to be in excess of $10 million, and if you add together the economic losses - the insured and uninsured losses - it’s going to be three times that at a minimum, based on current estimates.

“That’s an initial projection - that figure could go up based on the actual number of claims that come through.”

Mr Ward told Tribune Business that Bahamas First had received “a little over” 200 flood-related claims by Friday afternoon, and more were expected.

“We’re estimating, based on our current reserve levels and what we know, that our gross loss will be around about $3 million - ours and the reinsurance share,” he added.

“We looked at our 1997 claims experience, and factored in the size of the portfolio now and the value of the dollar [inflation], and the numbers we’re seeing now are pretty consistent with what we expected.”

Bahamas First had yet to receive all flood-related claims, but Mr Ward said that based on past experience all were expected to be in within the next two weeks.

He added that many potential claimants were still busy cleaning up, and those with insurance would be able “to get their lives back in order” quicker.

The Bahamas First chief said the flooding had proven non-catastrophe events could have “a significant impact”, the lesson being that Bahamians should not just focus on hurricanes when it came to protecting their assets.

Asked whether the flooding had been a wake-up call, Mr Ward told Tribune Business: “It has to be. There are a lot of people in New Providence, in particular, who think the island has been spared major hurricane damage in the cycle over the last 10 years, but this shows you don’t need to have a hurricane to have a major claims event.

“It shows the importance of having insurance in place to mitigate any exposure.”

Tom Duff, the Insurance Company of the Bahamas (ICB) general manager, told Tribune Business that while the underwriter did not have firm data yet, it was expecting claims “in the hundreds”.

“We know we’ve got a couple of significant claims - a property claim and a marine hull claim,” he told Tribune Business. “We know there’s a few significant ones in there.”

Acknowledging that the flooding “came from nowhere”, Mr Duff said major loss events were traditionally not expected in the Bahamas in May. The last similar event had occurred in 1997.

Last week’s heavy rains, Mr Duff added, were unlikely to result in many new claims. He suggested that their impact would have been felt most by those hit the previous week, so there may be “claims on top of claims”.