VI delegation in UK held talks with one of the largest insurance groups in the world
Deputy Premier and Minister for Financial Services, Labour and Trade Hon Lorna G. Smith, OBE (AL) reported at a press conference on September 16, 2024, that the VI delegation recently in the United Kingdom (UK) made sure to explore possible solutions.
She said such efforts included a meeting with Howden Group Holdings, an employee-owned insurance group that serves SMEs, corporates, and multinationals in more than 100 territories.
Hon Smith remarked that the VI is experiencing the cost of adapting to climate change, especially in the high cost of insurance premiums.
‘Excellent roundtable’
“I am pleased to say that we had an excellent roundtable with key members of the blue capital private sector, which included senior representatives of the Howden Group, one of the largest insurance groups in the world.
“We agreed that investability and insurability will be key to attracting significant private investment into the Virgin Islands. I am determined to continue our discussions with these experts to assess how we can best utilise their support. Importantly, we will also be looking at how we can best incorporate our financial services expertise into this effort. I was pleased that Peter Tarn, formerly of Harneys was able to join the meeting,” Hon Smith reported.
According to the Howden Group website, it has offices in 50 countries and a network of partners in more than 60 locations. Howden Group also said it has over 18,000 employees and $38bn in premiums.
Hon Smith said, given that the Virgin Islands is currently unable to access funds emanating from the UN Climate Change Convention and the Paris Agreement, “we know that private sector climate finance will be an important element in helping the Virgin Islands build resilience and develop adaptation measures to help mitigate the impact of climate change.”
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24 Responses to “VI delegation in UK held talks with one of the largest insurance groups in the world”
Thank-you. That is good news. We love and respect you for your efforts with regards to this troubling insurance situation issue.
NHI is failure, Schools out of toilet paper ect, fix the infrastructure. The country is falling apart while you guys travel and spend our monies.
“Insurance is the pooling, sharing of fortuitous losses by transfer of risks to insurers who are to indemnify insureds for losses to provide other pecuniary benefits on occurrences, or to render services connected with the risk.( George E. Rejda—Principles of Insurance).” Further pooling or sharing of losses is the heart of insurance. Insurance spread the losses by a few over the many, the group. The larger the number of people in the group, the lower the premiums paid by members. The average loss is substituted for the actual loss. Another factor that can lower cost is the Law of large numbers, ie,” the greater the number of exposures, the more closely will the actual results approach the probable results that are the expected from an infinite number of exposures.” The bottom line is that pooling a) entails sharing of losses by the entire group, b) the prediction of future losses with greater accuracy based on the Law of Large numbers.
The larger the number of people in a group the lower the premiums paid by individual members. With locales with small populations such as the VI can mean higher costs. Insurance companies like other businesses are in business to make a profit. What can the VI do to lower insurance of residents?
The VI government can a) self-insure or subsidized insurance costs . The likeliness of this is slim though, b) it can collaborate with other regional countries, ie, Caricom, to pool and share resources to meet regional insurance needs. c) work with large insurers to to add VI in dispersing their coverage over a larger geographical area. Was this the gist of what Hon Smith aim in meeting with Howden Group Holdings in the UK?
To E. Leonard, r@%$ meh son, you pierce the insurance bubble. With the BVI small population it looks like residents needing insurance may be on the hook for some hefty fees based the premise of insurance. Thinking about things now the BVI is a disaster prone area, ie, hurricanes, earthquakes, floods, etc to the risks and hazards are high, exposing insurance companies to high payout. To counteract, the potential high payout, they set individual premiums high. R@%$ mon! look like we up the proverbial creek without a paddle. Government becoming self- insured is not highly likely. It may be able perhaps to do some level of subsidizing. I like the suggesting about a regional pool with hundred of thousands if not millions in the pool. The cost would be spread across a large population, lowering cost. Who is going to take the lead in getting something going regionally? MoF what you say mehson? How are other regional countries handling their insurance needs? How universal are the principles of insurance? Insurance so high in the BVI so I take a big gamble in going without? It is either pay the high insurance cost and avoid some family needs and I cannot do that.
Multiply the insured cost of $300000 by the $50000 damage claim and divide by the 80% value which equates to $320,000: 300, 000X 50,000/320,000=46875. Your out of pocket or co-insurance cost is$50000-$46875=$3125. This figure does not include any deductible. It is to an insured advantage to insure for at least 80% of replacement value, if possible.
And, indeed, problem with living in small places is that insurance pools are smaller, so premiums will inevitably higher. Pooling with other areas is good for the insured, but insurance companies are looking to minimize pay-outs, so keeping it fragmented works better for them. And, remember, companies like Howden are driven by the profit motive. They’ll only come here if there’s money to be made, so why even think that they’ll do better than others. The govt’s past fiscal recklessness is also not likely to engender any kind of a sweetheart deal. As you reap…..