Thursday, July 02, 2020

February 4, 2020  -Jamaicans have been warned to expect property insurance rates to rise by 10-15 per cent this year because of “increasingly destructive Atlantic hurricane seasons in recent years”, even though the island itself has been spared the wrath of killer storms.

The caution was issued yesterday afternoon by the Insurance Association of Jamaica (IAJ), whose executive director, Orville Johnson, cited the Caribbean’s increased risk rating as a defining factor behind the impending hike, which is likely to bump up mortgage payments.

The rise in fees will reinforce the growing concern over climate change and the dangers it poses to small island states that are at greater risk of vulnerability to planet Earth’s temperamental swings, with record temperature highs, testing tempests, and brutal floods.

Harvey, Irma and Maria were among the most destructive Atlantic hurricanes on record, delivering a body blow to the insurance industry in 2017 with losses topping US$90 billion. Swirling storms have ping-ponged from the eastern to the northern Caribbean, carrying death and destruction in their wake, but Jamaica has in recent years escaped their wrath.

Last year, Hurricane Dorian, the most powerful storm to make landfall in the Caribbean, decimated The Bahamas, causing dozens of deaths and a US$8-billion wipeout to the economy.

Johnson said that Caribbean insurers subscribe to a common reinsurance pool, which has translated to Jamaica’s fling with fortune failing to insulate the island from the financial headwinds that have troubled the industry.

“International reinsurers are increasing their cost of coverage to the region in order to recover prior years’ losses, forcing local companies to also increase insurance rates,” the insurance sector leader highlighted in a press statement yesterday.

Speaking with The Gleaner yesterday afternoon, Johnson explained that a significant amount of insurance premiums – just over 50 per cent – is channelled into buying reinsurance coverage in the major catastrophes.

“We are exposed – there’s no question about it. With climate change being a factor, hurricanes are getting more intense and we just had a bout of an earthquake, so we have those double catastrophes that we are exposed to,” he said.

Johnson’s conservative estimate of 20 per cent property insurance compliance among residences here indicates that thousands of Jamaicans are at risk of losing their homes with no hope of recovery. Mortgages have the greatest power of compulsion, because of insurers’ determination to protect their investment.

“What you find is that when people take mortgages out, they insure their houses because they have to, but outside of that, there is a reluctance of persons to insure. Those persons who have paid for their houses, sometimes they feel no pressure to insure,” Johnson told The Gleaner.

The IAJ executive director said that mortgagors will not have the option of withdrawing when the hikes take effect, but noted that rates would differ in a competitive market among the 11 local general insurance companies that have membership in the association. Its other seven members trade in life insurance.

Of note, some of the local insurance agents have operations in Trinidad and Tobago, the Cayman Islands and The Bahamas, among other countries in the region.

Johnson bemoaned Jamaica’s blasé culture of property, life and health insurance – all of which are estimated to be below 30 per cent.

“People tend to be insurance averse for various reasons - cost factors, trust factors, sceptical or perhaps they are just risk takers,” he said, adding that locals have often chosen to ride their luck believing that “everything will be all right”.

NEW YORK (AP) — After voicing support for Woody Allen and criticizing cancel culture, Spike Lee apologized Saturday for words he said were “wrong.” In an interview Friday on the New York radio station WOR 710, Lee called Allen “a great, great filmmaker.” “This cancel thing is not just Woody. And I think that when we look back on it, (we’re) gonna see that, short of killing somebody, I don’t if you can just erase somebody like they never existed. Woody’s a friend of mine,” said Lee. “I know he’s going through it right now.”

 

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Nanci Ryder, a powerful Hollywood publicist and co-founder of BWR Public Relations who became close to such stars as Renée Zellweger and Courteney Cox, died Thursday of Lou Gehrig’s disease in Los Angeles. She was 67. Ryder was diagnosed with amyotrophic lateral sclerosis — or ALS — in 2014. The neurodegenerative disease gradually claimed her ability to walk, talk, eat and move. Her death was announced by publicist Lynda Dorf. Ryder’s clients — including Michael J. Fox, Reese Witherspoon, Viggo Mortensen and Sarah Michelle Gellar — blossomed into close friends. Zellweger thanked Ryder in her best actress acceptance speech when she won the Academy Award for “Judy” earlier this year. Witherspoon called her a “second mother.”