For the first time in its 25-year history, Bahamian insurer, Summit Insurance has released a portion of its catastrophe reserves owing to the substantial volume of claims from 2019’s Hurricane Dorian, reports The Tribune.
The devastating Category 5 storm hit the Bahamas over September 1st to 3rd, 2019 with sustained wind speeds of 185 mph, making it the strongest storm to have ever struck the nation.
The insurance and reinsurance industry loss from Hurricane Dorian is believed to be in the range of $4 billion to $8.5 billion.
The President of insurer Summit Insurance, Timothy Ingraham, recently spoke with Tribune Business and revealed that the company’s Board of Directors approved the release of $600,000 after Dorian resulted in annual claims of over $200 million, which is almost four times as high as its previous record.
“We had a catastrophe reserve fund which was designed specifically for events similar to what we experienced last year with Dorian. The Board made the decision to release a portion of the reserve, and that was the first time we did that in the company’s 25-year history.
“The next biggest claim to Dorian was $60m in losses from Hurricane Frances in 2004, and then we had Hurricane Jeanne in 2004, which was another $14m. The Bahamas has been impacted by 13 named storms in the last 20 years, so local insurance companies have certainly been tested quite frequently by storms,” Ingraham told Tribune Business.
Hurricane Dorian hit the Bahamas as a truly devastating storm, with the resulting damage significant enough to see a well-established insurer have to call on its cat reserves for the first time ever.
Towards the end of January, The Tribune reported that, owing to Hurricane Dorian, over $1 billion in reinsurance payments are set for flow to the Bahamas, of which residents will receive 50%.