The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama has accounted for almost two-thirds of the $409 million in gross Hurricane Matthew claims reported to the Bahamas Insurance Association (BIA) to-date.

Emmanuel Komolafe, the BIA’s chairman, told Tribune Business that more than $267 million in gross insurance claims have been submitted by businesses and residents on Grand Bahama, which was especially hard-hit when Matthew’s winds and storm surge strengthened to Category Four force.

Giving an industry-wide update, Mr Komolafe said that based on data passed to the BIA to-date, New Providence had got off relatively lightly in comparison with just over $125 million in gross claims reported to-date.

He added that the Bahamian property and casualty industry’s estimate of $400 million in total Matthew-related insured losses, given days after the storm’s passage in early 2016, had “held true and steady” based on current performance.

“From a review of returns made to the BIA to date, Grand Bahama accounted for 65 per cent of the total claims incurred, while New Providence accounted for 31 per cent of the total,”Mr Komolafe revealed.

“Property claims accounted for $401 million or 98.1 per cent; motor $4.2 million or 1 per cent; and marine $2.4 million or 0.6 per cent. The actual incurred losses are very much in line with estimated gross incurred losses.”

He said BIA member underwriters had received property insurance claims totalling $265 million from Grand Bahama to-date. The balance comprised $1 million in motor vehicle claims; $674,000 in marine insurance claims; and $533,000 in engineering-related claims.

The insurance industry data provides further insight into just how badly Freeport and wider Grand Bahama, and their economy and society, were hit by Matthew.

It is an indication of why the private sector is still struggling to recover, with the former Memories property and most of the Grand Lucayan still closed, and around 1,100 hotel and casino workers looking for jobs.

Elsewhere, Mr Komolafe said the BIA’s general insurance underwriter members had received $120 million in total property claims on New Providence. The remainder includes $3 million in motor vehicle claims; $1.6 million in marine claims; and $402,000 in engineering related-claims.

Breaking down the claims experience in an interview with this newspaper, Mr Komolafe said the bulk related to property damage.

He added that, nationwide, residential properties accounted for 25.4 per cent of property claims, with the majority - 74.6 per cent or almost three-quarters - relating to more costly commercial or business properties.

Mr Komolafe said: “The BIA’s assessment showed that total property insured in New Providence was approximately $10.8 billion or 65 per cent of the total property aggregates for the Bahamas, and $4.2 billion in Grand Bahama or 25 per cent of the total.”

He added that the latest claims data was an update on the initial $176 million figure provided at last month’s Grand Bahama Business Outlook, and brought the Bahamian insurance industry into line with its original estimates.

“There are many lessons to be learned from Hurricane Matthew,” Mr Komolafe told Tribune Business, suggesting that its impact on the two major population centres highlighted the need for a National Disaster Risk Management framework.

The BIA chairman argued that this would “enhance the resilience of the Bahamas to natural disasters”, and added: “The recent hurricanes - Joaquin and Matthew - highlighted vulnerabilities that we have been aware of as a nation, and showed how the country’s fiscal condition, economic development plans and macroeconomic indicators could be negatively impacted by natural disasters.

“While the Bahamas is regarded as the first Commonwealth Caribbean country to introduce a mandatory building code, there is a need for the ongoing review and enforcement of building codes,” Mr Komolafe continued.

“These reviews should be carried out frequently - perhaps every five years - and followed by appropriate revisions where appropriate. We ought to also ensure that the standards are adhered to as Hurricane Matthew exposed the structural vulnerability of some damaged buildings. Additionally, we will need to consider on a national level the building of structures in vulnerable locations in low lying areas and near the coast.”

Mr Komolafe said that based on the BIA’s own damage assessments, “special attention will need to be paid” to reinforcing the connection, and anchoring, of roofs.

“It is common knowledge that roof loss compromises the integrity of a structure during and after a storm,”he added. “It is also time to rethink our approach to town planning and infrastructure that support the delivery of amenities such as electricity, water, telecommunications....”

Mr Komolafe said the installation of underground utility cable was one possibility that should be explored, although he conceded that this may not always be possible when dealing with the need for infrastructure such as communications towers.

The BIA chairman said one of the few, if any, ‘positives’ flowing from Hurricane Matthew were the $250-$300 million foreign currency inflows associated with reinsurance monies coming into the Bahamas to help payout insurance claims.

Apart from boosting the construction and retail sectors, Mr Komolafe said these inflows would also enhance the Bahamas’ external currency reserves.

“The importance of the insurance industry as a risk transfer mechanism is apparent based on the fact that the speed and value of insurance payments have been instrumental in the recovery process,” Mr Komolafe said.