General Manager of Colonial Insurances, Ms Kishma A. Baronville has unveiled that insurance companies buy coverage from other insurance companies around the world, and thus, this makes it impossible for there not to be a rise in premiums to policyholders. Photo: Team of Reporters

An increase in the frequency of major calamities in the Caribbean and around the world have caused a surge in pay-outs by reinsurers. As a result, reinsurers have made demands for higher rates and deductibles,” the General manager said. Photo: Internet Source

The forum, which was held to raise more awareness of the insurance issues that some property owners are facing, was hosted by the BVI Financial Services Commission (BVI FSC), under its Money Matters BVI—which is the FSC’s financial literacy program. Photo: Team of Reporters

Ms Baronville made the revelation to stakeholders and policyholders when she was speaking at the Financial Services Commission (FSC) Money Matters Insurance Division which is currently working on a Code of Conduct for insurance companies. According to the body, they see the Code of Conduct as necessary following the disasters of 2017 and because of the many issues that were brought to the fore between policyholders and insurance companies.

We buy Insurance – Baronville

“Did you know that your insurance company purchases insurance? Then you are familiar with the term reinsurance,” said Ms Baronville as she went on to explain that insurance is coverage that is bought by the insurance company from another insurance company (the reinsurer), as a means to mitigate the risk of losses.

“All insurance companies buy into a global pool of reinsurance... Therefore, global catastrophes affect us all, reinsurance is put in place to protect the solvency,” she revealed.

Further, Ms Baronville said that given the there is no frequent major disasters in the BVI, this resulted in a soft market and lower rates compared to counterparts in the Caribbean Region.

“An increase in the frequency of major calamities in the Caribbean and around the world have caused a surge in pay-outs by reinsurers. As a result, reinsurers have made demands for higher rates and deductibles.”

She said rates may vary depending on the insurer and their arrangement with their reinsurers while noting to policyholders, that after repairs, the value of their homes increases, hence the coverage and premium would follow.

Increased Premiums

According to Ms Baronville, due to this surge in pay-outs, increased premiums must be charged to build reserves to prepare for any future disasters.

However, Acting Director of the FSC Insurance Division, Ms Trevecca Hodge said that they are working on some changes to the legislation as well as a Code of Conduct, which will provide guidelines for the insurance industry.

The forum, which was held to raise more awareness of the insurance issues that some property owners are facing, was hosted by the BVI Financial Services Commission (BVI FSC), under its Money Matters BVI—which is the FSC’s financial literacy program.