Bleeding Premiums

Even with insurance rates rising for commercial properties in the city and risk going into the red, business people are throwing their support behind the city.

In some instances, premiums have increased since the beginning of the year by as much as 15 percent.

Insurance expert and columnist, Bernard Acquing, said while it is still too early to tally the insured losses, "in the overall scheme of things it is very likely that in insurance terms the payout will be insignificant accounting for less than one (1 percent) of the market premiums in respect of property insurance.

"The concern," he said, "for the insurance community is not the quantum but rather the circumstances of the loss and the message such a loss in the capital city sends to all and sundry in particular the outside world."

"We live in a global village where information is in real time and interactive and reports in the media paint a sad picture of the inadequacies of our services and the emphasis is on spin and deflecting blame," he said.

The insurance companies, he added, will only become more selective in insuring buildings in high risk areas. Premium rates, which are already on the rise, will continue their upward movement and owners will have to pay a greater role in safety and risk management, he warned.

"The concern," he said, "for the insurance community is not the quantum but rather the circumstances of the loss and the message such a loss in the capital city sends to all and sundry in particular the outside world."

"We live in a global village where information is in real time and interactive and reports in the media paint a sad picture of the inadequacies of our services and the emphasis is on spin and deflecting blame," he said.

The insurance companies, he added, will only become more selective in insuring buildings in high risk areas. Premium rates, which are already on the rise, will continue their upward movement and owners will have to pay a greater role in safety and risk management, he warned.

Sagicor’s boss Alan Cabral said even before last week’s fire, insurance rates for commercial properties in urban areas — downtown Port-of-Spain and San Fernando — had increased since January.

He explained that this was in light of the record number of hurricanes which occurred in the Caribbean last year. Asked what were the current insurance rates for commercial properties in downtown Port-of-Spain, Cabral said that it was difficult to give exact figures because the situation differs from one property to another.

He said in any event, properties in downtown areas in both north and south have always attracted higher insurance rates than other areas — but there was no evidence from an insurance standpoint that concerns about fires or any other risk would act as a deterrent to business investment in those areas.

In an interview, Downtown Owners and Merchants Association (DOMA) president Gregory Aboud said as unfortunate as last week’s fire was, when compared to last April’s blaze in downtown Port-of-Spain, firemen were able to contain the blaze and prevent further losses. "Last week’s fire, although very unfortunate, is not anywhere as serious as before," he said. "What was most unfortunate last week was that the fire could not be contained in the original building and that it affected buildings to the north and south of it," the DOMA president stated.

He noted that more than 100,000 square feet of commercial property were destroyed in the April 2005 fire and only 7,000 square feet of commercial property were affected by last week’s fire, : "Therefore, we are confused as to why this is being portrayed in such dramatic terms," Aboud said.

Asked whether fires in the city would repel business in Port-of-Spain or force them to close up shop, Aboud said there is clear evidence to show that the city remains a good place to be.

"Retail sales in downtown Port-of-Spain are continuing to recover. Parking has been expanding on city streets and the operations of the police are yielding greater conditions of safety than we have had in many years," he declared.

He said one of the reasons why DOMA is so optimistic and confident stands at the corner of Frederick Street and Independence Square: Salvatori Building.

"If properly conceptualised it will be a crucial instrument in the future development of downtown Port-of-Spain," Aboud said and also identified the multi-million dollar Government Campus as another positive sign for business development in the city.

Mayor Murchison Brown said fires happen from time to time in all major cities in the world and does not see this latest one as a hindrance to business in the city. He cited "Mangoes" which opened its new restaurant at the corner of Chacon Street and Independence Square and Papa John’s Pizzeria set to open its second outlet on Independence Square.