Hugh Barbanell, Senior Managing Director at AON Insurance
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Hugh Barbanell
Global insurance companies have deemed local insurance rates to be too low, which could threaten the profitability of the market, and force some reinsurance firms to leave the market.
That revelation was made by Hugh Barbanell, Senior Managing Director at international insurance firm AON Insurance.
Adressing a press briefing on Wednesday, Mr. Barbanell said some rates may have to see increases of more than 20 per cent.
"You guys are in the headlights a bit because your rates have not been adequate. And reinsurers have been pressuring for the last couple of years to push up rates, but between the market dynamics, it just was not happening," he explained.
Mr. Barbanell said reinsurance companies are finding it difficult to add more financial capacity.
"And with the constraints on their capacity and the shortage of capacity in the market, there will be a flight when you have an event. That capital then gets locked up after the event, and there's no additional capital that the retro markets can get, shrinking the level of capacity they can give to reinsurers," he noted.
The AON Insurance senior managing director said although multiple building projects are ongoing and this will increase the need for insurance, the companies in Jamaica just "cannot get that additional capacity at this time".
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