AM Best is to review the credit ratings of the major property/casualty (P&C) and life/health insurance companies operating in the Bahamas following the devastating impact of Hurricane Dorian in the region.
The ratings have been placed under review with developing implications in light of the widespread destruction and limited information that is currently available with regard to loss of life and property, as well as the status of the medical delivery system and overall economic impact.
AM Best acknowledged that rated P&C insurers in the Bahamas typically purchase significant catastrophe protection.
However, it remains concerned about the scale of potential insured loss given the magnitude of the storm and the absence of timely information.
Dorian is the strongest hurricane to have ever hit the Bahamas, making landfall earlier this week as a Category 5 storm with wind speeds of up to 185 mph.
Reports suggest that some areas of the island have been utterly devastated, with the International Red Cross estimating that 45% of the homes on Grand Bahama and the Abacos Islands have been severely damaged or destroyed, representing some 13,000 properties.
At present, estimates from AIR Worldwide indicate that re/insurance industry losses in the Caribbean could be between $1.5 billion and $3 billion, while overall economic losses could be as high as $7 billion, according to Karen Clark & Company (KCC).
The ratings will be removed from under review with developing implications following a complete analysis of each company’s financial strength in the aftermath of Hurricane Dorian.
Companies under review include: members of Bahamas First Holdings Limited; RoyalStar Assurance Limited Ltd.; Colina Holdings Bahamas Ltd.; Colina Insurance Limited; FamGuard Corporation Limited; Family Guardian Insurance Company Limited: members of Colonial Group International Limited; and Summit Insurance Company Limited.