The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian insurers hit a “stalemate” with their global reinsurance partners due to an “unprecedented” year of fire-related losses and payouts in 2025, it was revealed yesterday, with property coverage costs set to remain “flat” for business and homeowners this year.

Anton Saunders, RoyalStar Assurance’s managing director, told Tribune Business that his and other local property and casualty underwriters were neither satisfied not dissatisfied with the outcome of the latest annual reinsurance renewal negotiations as they obtained sufficient capacity that will allow clients to secure the protection they need.

While Bahamian carriers had successfully argued that the impact of Hurricane Melissa’s multi-billion dollar damages should be confined to Jamaica, and not used to justify premium rate increases for other Caribbean territories, he added that reinsures had countered by pointing to the higher-than-normal fire-related claims payouts in this nation.

Mr Saunders described the number and severity of fires as “unprecedented” in 2025, including the multi-million dollar damages and losses stemming from the blaze that destroyed the Solomon’s and Cost Right Old Trail Road outlets, as well as the planned new head office for the Department of Labour and other government agencies.

Other fires included the blaze that struck PrimeOne Seafood and Steakhouse, located in the One West Plaza, in early June, plus the Bay Street and Elizabeth Avenue fire in downtown Nassau that destroyed the residences in Victoria Court. Mr Saunders estimated insured fire-related losses and payouts at a total $50m.

And, with reinsurers covering the bulk of these claims, the RoyalStar chief said the treaty renewal negotiations will likely result in neither increased nor decreased insurance premium costs for home and business owners seeking to protect their property assets from the increasing frequency and severity of hurricanes.

“The negotiations were completed,” Mr Saunders confirmed to Tribune Business. “We ended up with a stalemate between the reinsurers and ourselves. The price has remained flat, the terms and conditions remain flat.

“We were able to successfully argue that the losses in Jamaica [from Melissa] were a Jamaican event, so premiums elsewhere should not increase, but they argue we had $50m worth of fire-related losses so they cannot decrease it. It was a stalemate, but we were happy we got the capacity we were looking for.

“We are happy there was no rate increase for the territories we write business for, and will use the facultative market for some higher risks and meeting the capacity we will need. It was a stalemate.”

AML Foods, the BISX-listed owner and operator of the Solomon’s and Cost Right food stores, previously revealed it received a more than $23m payout from its insurers to cover the damage and loss caused by the mid-April blaze that destroyed the Old Trail Road locations.

Speaking to the fire-related payouts that Bahamian property and casualty insurers endured in 2025, Mr Saunders added: “We had some restaurant fires [PrimeOne] out west and normal fires that happen with homeowners. It was an unprecedented fire loss year in 2025.

“We were not involved in the large fires. but had our share of smaller ones. It could have been worse. We could have been in Jamaica where we would have had to help pay that loss. All in all, were we satisfied with it? No. Were we dissatisfied with it? No. Stalemate.”

Foreign reinsurers largely dictate Bahamian insurance premium costs due to the domestic industry’s heavy dependence on them to help fully underwrite risks domiciled in this nation. Bahamian property and casualty insurers, due to their relatively thin capital bases, have to purchase huge quantities of reinsurance annually to enable them to underwrite the multi-billion risks present in this nation.

This means that the premium prices Bahamian households and businesses pay for coverage are largely determined by what reinsurers charge, making the annual treaty renewal negotiations with local carriers critical in determining these costs.

Stung by previous multi-billion dollar losses from major hurricanes hitting the US and Caribbean, as well as other catastrophic event payouts, many reinsurers previously either pulled out of the region altogether or reduced the capacity and availability of coverage here. The reduction in reinsurance supply resulted in Bahamian insurance premiums increasing in cost by as much as 20 percent since 2022.

This resulted in escalating affordability concerns, and fears that growing numbers of Bahamian homeowners and businesses were being increasingly priced out of the insurance market and unable to afford the necessary protection for arguably their most important asset - their real estate.

Timothy Ingraham, chief executive of Summit Insurance Company, through which Insurance Management places much of its property and casualty business, echoed Mr Saunders in confirming that all-perils insurance premium prices will likely remain “stable” in 2026 compared to last year with an adequate supply of coverage available to clients.

“Treaty renewals have been completed with capacity not being an issue,” Mr Ingraham said via messaged reply to Tribune Business inquiries. “This means that cover should not be hard to find.

“Pricing for this region remained firm as reinsurers likely were reminded by damage from Melissa of the loss potential in the region. Rates should remain stable and we do not anticipate any increase in rates for 2026.”

Jamaica is still calculating the total losses and damage from Melissa, with the initial estimates placing the latter as high as $8bn. Projections for insured losses were as high as $4bn, with payouts for onshore property damage pegged at between $2.4bn and $4.2bn.