SIBA estimates insured Irma losses at over US $3 billion

PHILIPSBURG–The St. Maarten Insurance Brokers Association (SIBA), on Tuesday, estimated the insured losses in St. Maarten as a result of Hurricane Irma at more than US $3 billion dollars.

SIBA President Neil Henderson told Members of Parliament (MPs) during a meeting of the Central Committee of Parliament that the damage to property alone can “easily” be tagged at US $1.1 billion. “If you look at the amount of persons living in St. Maarten – let us say 50,000 – and let us say 20,000 are property owners and from that 40 per cent would have insurance, and that 40 per cent persons have an average of two properties because many persons in St. Maarten have apartments. When you do the math and take the average loss, it amounts to about $80,000 (per person) because most roofs were damaged – you’re easily looking at $1.1 billion just for property loss and we are not talking about economic losses, and we are not talking about losses related to motor insurance either,” Henderson told MPs. “I know that St. Maarten has at least 30,000 vehicles driving around so when you do all of that, looking at insured losses that would easily exceed $3 billion.”
He said some establishments are insured by local insurance companies and some by foreign insurance companies.
In response to a question posed by an MP as to the difference between break-ins and looting, Henderson said this has to do with the definition in one’s insurance policy. Break-ins are sometimes classified as burglary, while looting is sometimes seen as a consequential loss resulting from a hurricane. He said clients have to look at their coverage and clarify these issues before proceeding with insurance.
As it relates to potential premium hikes, Henderson said “without a doubt” an increase in insurance premiums can be expected. “It is no secret that the region has been devastated by multiple events we are looking at Irma, Maria and a whole lot of territories in the region [that were affected – Ed.],” he said alluding to disasters in Texas, Miami, Puerto Rico, Mexico, Santo Domingo and Haiti. “When you take all that into account and realise re-insurers accept risk all over the world – we’ve had a very active hurricane season – and all these claims are bouncing back to reinsurance companies, it will trigger a reassessment of their premiums to insurance companies. If I have to look at what happened in 1995 [after Hurricane Luis – Ed.] then without a doubt we can all expect that there will be some kind of premium increase.”
In his opening presentation to Parliament, Henderson said following Irma, many adjustors had to be flown into St. Maarten which was a challenge because of restrictions due to damages at Princess Juliana International Airport SXM and immigration adjustments. Other challenges were impediments with phone service, challenges finding addresses, curfews and the threats of Hurricanes Jose and Maria. He said all these factors combined resulted in insurance companies having “productive time” of just about one month between when Hurricane Irma hit the island on Wednesday, September 6, up to yesterday Tuesday, November 7.
Also to be considered, he said, is that insurance companies in negotiating claim settlements have to depend on third parties not related to the insurance sector for things such as estimates, quotations of contractors, unpredictability of prices in construction and scarcity of specialised expertise when it comes to things such as specialised equipment.
“The industry has been under tremendous strain as there was one month of productive time and SIBA understands that this puts a big burden on consumers and insurance,” Henderson said. “In the first weeks it’s easy to accept that you are part of something major, but as time goes on people have to focus on their individual reality and this is taking a toll on processing claims.”
In answering a question from an MP, Henderson said insurance company clients have the freedom to decide with whom they want to reconstruct their homes or repair their vehicles. He said if an insurance company tries to influence in that process “it is not necessarily a bad thing,” since they work based on an indemnity principle and it behoves them to make the best financial decision to not adversely affect their funds. Some insurance companies, for example, make agreements with garages to receive discounts if they professionally repair clients’ vehicles at their establishments. Clients can choose not to accept this arrangement and should be free to go elsewhere and if they do, the discount should not adversely their choice.
He said clients who have concerns with their insurance policy should seek consultation with a registered insurance broker or agent. Henderson raised a number of other issues during the meeting and responded to several other questions posed by MPs during the session.
Following the presentation by Henderson, Chairperson of Parliament Sarah Wescot-Williams adjourned the meeting due to lack of quorum as only seven MPs had been present: Rodolphe Samuel and Ardwell Irion (NA), Wescot-Williams and Perry Geerlings (DP), Chanel Brownbill (US Party) and Claret Connor and Sidhart “Cookie” Bijlani (UP). There were other agenda points that were not yet handled.
Samuel questioned why the meeting was being adjourned when four fractions were present in Parliament. He said it seems as though the Rules of Order were being used interchangeably and being explained as if it is correct. Wescot-Williams responded saying that a meeting of the Central Committee to which third parties have been invited can continue if there is no quorum if at least half the fractions are present; however, for meetings to which there is no third party, a quorum is needed.

Source: The Daily Herald