President of Bahamian insurer Summit Insurance Company, Tim Ingraham, has revealed how the company’s “conservative reinsurance” programme enabled it to record a relatively unchanged net equity of more than $25 million in 2016, despite the adverse impact of Hurricane Matthew.
Speaking to Tribune Business, Ingraham revealed that prior to Hurricane Matthew, which hit the Bahamas in early October before tracking towards the Florida, U.S. coastline, Summit Insurance was on track to record its best year for five years.
However, the intense storm resulted in 1,500 claims for Summit Insurance, amounting to $38 million, which saw the insurer’s comprehensive income decline from $3.066 million in 2015 to $1.176 million at year-end 2016. The majority of the decline was a result of underwriting gains declining by more than 50% to $2.102 million, which in turn was a result of lower net premiums and higher net claims of $4.587 million, driven by Hurricane Matthew.
But despite the impact of the storm on the company’s balance sheet, Ingraham told Tribune Business; “We’re definitely satisfied that the year ended on a positive note for us. We were having a fairly good year before the storm, and that helped to carry us through, despite the cost of Matthew. The work done in the early part of the year helped to support the year-end.”
Summit Insurance utilises a comprehensive reinsurance programme, which last year enabled it to report a basically unchanged net equity of $25.353 million at year-end despite Hurricane Matthew losses.
“We have a fairly conservative storm deductible. It does mean that we buy a lot of reinsurance, but we preserve the company and ensures we will be here to serve customers for future storms,” Ingraham told Tribune Business.
The fact that the insurer’s balance sheet remained solid post-Matthew is a sign of how effective, comprehensive and necessary its reinsurance programme is, enabling it to protect is capital and continuing serving its clients even during testing times.
Insurance and reinsurance protection is vital for poorer, more vulnerable parts of the world that are highly susceptible to natural catastrophe events, and the support provided by Summit Insurance’s conservative reinsurance programme highlights the benefits.
“We think we absorbed the blow from Matthew very well. We’ve absorbed bigger blows. I think this proves we’re a solid company, and people can certainly put their trust in us to protect their property,” added Ingraham.
