The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian property and casualty insurers yesterday reported “a surge” in business volumes due to a last-minute rush to obtain coverage before Tropical Storm Erika strikes.

Patrick Ward, Bahamas First’s president and chief executive, told Tribune Business that approaching storms frequently prompted Bahamians who had missed policy renewal dates, or had been trying to get by without insurance, to take out coverage.

“It’s been quite busy actually in the last few days,” he said. “I think that whenever these events occur, it reminds people why it’s important to have insurance protection in place.

“We typically see a surge in activity leading up to an event. People are suddenly confronted with the potential for damage or loss.”

Mr Ward said it was “hard to say” how much damage Erika would do in the Bahamas, and the possible level of insured losses, as much depended on its path and strength - especially whether it hit the major population centres of New Providence and Freeport.

This is where most of the insured risks in the Bahamas are concentrated. While acknowledging that Erika was still a tropical storm and “not well organised”, Mr Ward said Bahamas First was “a little bit concerned about potential flooding issues” given the likely heavy rainfall that result.

He explained that Bahamas First’s policy was to stop taking on new insurance business once an area went under a storm ‘watch’ or ‘warning’, meaning that it is now not writing new policies for the southeastern Bahamas. Due renewals for islands in that area are still being written, though.

Anton Saunders, RoyalStar Assurance’s managing director, said the underwriter stopped writing new business once there was a storm that could threaten the Bahamas within three-four days.

While it has now stopped writing new business throughout the country, like Bahamas First it is still honouring due renewals.

Mr Saunders agreed with Mr Ward that much depended on Erika’s path and force, adding that based on the computer models and forecasting he had seen it was “50/50 as to whether it’s going to hit us and the islands where the aggregate insurance pool is deepest”.

He added that Erika was unlikely to cause “major damage” even if it became a Category One hurricane, provided it moved fast, with the main problems likely to result from rainfall and flooding.