The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas Insurance Association’s (BIA) chairman yesterday said a public-private partnership (PPP) is required to manage risks associated with catastrophic events such as hurricanes.

Emmanuel Komolafe, a scheduled speaker at next week’s Bahamas Business Outlook conference, said that at last check, the insurance industry had

had pegged gross losses from Hurricane Joaquin at $14 million, a sum equivalent to just 23 per cent of the initial $60 million damages estimate.

“What became clear to us is that as you go further south along the chain of islands of the Bahamas, the level of insurance penetration begins to fall,” Mr Komolafe said.

“A number of things are responsible for that. You have to look at the population and level of economic activity. It’s not surprising that on the major islands you would have most of the concentrationof insured risk.”

Mr Komolafe added: “One of the things we want to do going forward is increase the level of education when it comes to insurance. In its absence, persons will either have to foot the bill themselves or the Government will have to assist one way or the other.

“Insurance is not just for individuals or corporate entities but also for the Government.

There has to be some form of public-private partnership as to how we actually manage the risk emanating from catastrophic events such as hurricanes.”

Commenting on the impact of Value-Added Tax (VAT) on the insurance industry, Mr Komolafe said it was still assessing the effects, although he acknowledged that when comparing health insurance to property and casualty insurance it has been “almost like a tale of two cities”.

“Life and health insurance, when compared to property  and casualty insurance, has been almost like a tale of two cities,”he said. 

“Luckily, on the property and casualty side the rates fell around the same time as VAT was introduced, so it kind of softened the blow of VAT Some persons, even with the addition of VAT to their policies on the general insurance side, may have seen no changes or minimal change  in their premium rates.”

Yet he added: “There is a direct correlation between health insurance premiums and medical costs, and we also know that there is medical inflation.

“The cost of healthcare continues to rise. There has been an impact on the cost of health insurance. What we are now, as an industry, doing is beginning to assess it. Six months is a short period, but I think that looking at it after a year the data will become more meaningful for analysis purposes.”