| The main factors for
escalating premiums are
Poor claims experience from the local
pool of business. All premiums collected are pooled
together to pay for claims. If there is a significant
increase in the number and costs of claims within the
annual contract, the entire pool will be adjusted the
following year.
Poor claims internationally. Local Companies
all buy additional coverage from International Re insurers.
The premiums collected locally cannot cover Catastrophes
such a Hurricanes, Storms and other large mass damage.
If the International Re insurers have had an active
year because of Typhoons or storm damage internationally
or in more recent times, the losses caused by the bombing
of the World Trade Center, they will charge us more
for the cover we buy and demand a rate increase.
For the Property Market, it is the re
insurer who often determines what rates are charged
locally. Remember that this is a hurricane prone region
and even if one does not hit Jamaica, the US and the
other Caribbean Countries are hit almost every year.
Re insurers have threatened to withdraw from the region,
which would make insurance unavailable and unattainable
for most people.
This would seriously threaten the economic
and social stability of the Country. Government funds
and international Aid would not be enough for us to
rebuild as we did after Gilbert.
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