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Barbadians to pay more for insurance soon

Barbadians will start seeing a hike of about 10 per cent in their property and motor insurance rates by March.

President of the General Insurance Association of Barbados (GIAB) Randy Graham said on Monday that local companies had no choice but to pass on at least a portion of the increased costs of reinsurance.

He said the increased costs were influenced by the US$55 billion in claims paid out by reinsurance companies for damage caused by hurricanes in the region in 2022.

“The world is so small…people always say we didn’t have any bad ones in Barbados, and they are right. But everything is so interconnected now. The same reinsurance companies that are bringing the capacity to Barbados are the same ones who are dealing with the hurricane losses in Florida or the hail storms in France. In the same way we get the benefits of being globalised, we also get these negative pressures of being part of the global economy as well,” Graham said in an interview with Barbados TODAY.

“We are going to work through the year to see what we can do to help the people in Barbados control the insurance costs, but it is going to be very difficult to stop the rate increase during the first part of this year for sure,” he explained, adding that the upward adjustment in reinsurance costs to companies ranged between 15-30 per cent.

The GIAB head said companies in Barbados and other Caribbean countries had a difficult time acquiring the capacity that was necessary.

“Many of the companies went through a renewal of the reinsurance programme. Most of their programmes have been renewed on January first, so a fair number of them are now completed. We had a rough time getting the capacity in the Barbados market and in some of the other Caribbean markets as well,” Graham stated.

“So we have already started to see rate increases in many of the other Caribbean markets and we expect to see them in Barbados as well because the reinsurance capacity is just short in supply. We expect to be able to contain increases in Barbados to maybe around 10 per cent. They will vary by individual companies, but if you get a 10 per cent increase on your house insurance that was $1,000 last year, it will be $1,100 this year. It is that type of increase we expect the public to start seeing maybe from February/March,” the spokesman for the general insurance sector explained.

Graham said he had hoped to have delivered better news to Barbadians at the beginning of the new year.

“Hopefully we get a good 2023 and a better outlook for the future, but right now we are suffering like everybody else,” the insurance executive declared. 

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