Risk City

Insurance companies are currently thinking about reviewing their commercial insurance rates for properties in Port-of-Spain. It comes days after Saturday’s fire that gouged a hole in downtown Port-of-Spain and which destroyed several businesses and threw hundreds of persons on the breadline. Some experts take the view that insurance rates for companies are not expected to increase but there was need for review. According to Sagicor General Manager, Alan Cabral, last weekend’s fire in Port-of-Spain by itself should not cause an increase in commercial insurance rates in the city. 

There are other factors involved. “We are looking at the situation and will take a decision following a review of the city,” one insurance company official said. “It does not take rocket science to come to the conclusion that the city is high-risk and there is very little that could be done to improve the risk by way of sprinklers or other devices. It is those circumstances that there is the need to appreciate the risks and to take steps to manage and reduce these risks,” said Bernard Acquing in his Business Day column today. (See Page 6)

The insurance consultant said that the fire could not come at a worse time, noting that across the region insurance premiums rose following the spate of hurricanes in 2004. “The average premium rate in the Bahamas or Cayman is roughly 4-5 times what the ordinary homeowner pays in Trinidad and Tobago and the international reinsurance market has been applying pressure on local insurance companies to increase premiums since we have both  hurricane and earthquake exposures.” Acquing took the view that premium hike was inevitable. “The only reason that premiums have not risen appreciably is that market forces are at work but at some point in time upward movement must take place as this is inevitable,” he said in his column.

Cabral, drew  reference to the damage suffered by  Port-of-Spain business places during the July 27, 1990 coup attempt, saying that there was no increase in insurance rates following that incident. At that time, he explained, a coup was not something which insurance was provided for. He indicated that following the coup, people demanded that certain safeguards be put in place to cover such risks in future and this led insurance companies to offer a terrorism and sabotage policy. While some companies still offer this particular policy today, few persons access it because they do not feel it is necessary, he said in an interview.

On the other hand, Cabral said fire is a contingency which all insurance companies cater. He said the silver lining in last weekend’s tragedy, is that insurers will now put pressure on the relevant authorities to ensure that all the necessary fire safeguards, particularly a reliable water supply, are put in our centres to prevent another incident like what took place on Saturday. But in the aftermath of the fire, insurers are now reviewing their respective portfolios to ensure that all of their risks are covered, particularly in city’s high-risk areas.

In a statement, Association of TT Insurance Companies (ATTIC), vice president Gerald Hadeed, said insurance companies have suffered substantial losses as a result of the many fire conflagrations in downtown Port-of-Spain over the years. Hadeed said it was time for the insurance industry to insist that Government “maintain our firefighting equipment and systems in proper working order.”

Hadeed also agreed with calls from the Association of Professional Engineers of Trinidad and Tobago (APETT) for the Port-of-Spain Cor-poration to take immediate steps to inspect all buildings in Port-of-Spain to determine whether they comply with approved building codes. APETT said if this is not the case, the Corporation must insist that the respective owners carry out corrective and remedial work to their buildings.