Hurricane intensity and frequency raise reinsurance fears

 

Insurance executive Orville Johnson believes the move by major insurance companies pulling out of Florida in the United States due to the frequency of hurricanes could have a spin off effect in Jamaica.

 

These US based insurance companies say the risk of insuring properties in Florida is too high, given its exposure to hurricanes, along with rising construction costs and high litigation against insurance companies. 

 

In 2023, Farmers Insurance became the first major insurance company to leave the state.

 

Mr Johnson, speaking Sunday on Radio Jamaica's That's a Rap, explained that Jamaica has also had challenges getting re-insurers interested in providing such coverage, because we are relatively small and our dollar is small when you convert it to US (dollars), we are part of that overall area within the region, so whatever happens in the US affects us here."

 

As a result he said, "we've had some issues and we would have seen that in the insurance premiums we have had to pay over the last year or two."

 

He said the region could face a dilemma in property insurance premiums with the frequency of hurricanes possibly further turning away reinsurers.

 

In that regard, he noted that "one in a thousand year" hurricanes have become regular occurrences.