NASSAU, BAHAMAS — Bahamian insurers are closely tracking Tropical Storm Erin’s path amid fears that a major hit to Atlantic property could further drive up already elevated reinsurance rates, which are a key cost driver for the local market.
Timothy Ingraham, chief executive of Summit Insurance Company — through which Insurance Management Company places much of its property and casualty business — said the industry is on heightened alert.
“Insurers are definitely keeping a very close eye on the track and intensity of this storm and are hopeful that it will make that northward turn before getting into our area,” Ingraham said. “For the first half of the year global catastrophe losses were near historic highs, which does cause serious concerns regarding reinsurance rates, which remain fairly high for our area. A major storm impacting property in the Atlantic basin would not help this situation.”
Tropical Storm Erin, located in the central Atlantic, is expected to strengthen rapidly over the coming days. Forecast models predict it will reach hurricane status by Thursday or Friday, and potentially become a major Category 3 or stronger storm by Sunday, August 17. While the current track suggests it will pass north of the Leeward Islands and Puerto Rico before veering northeast of The Bahamas, meteorologists warn that changes in the storm’s path are still possible.
The storm comes at a time when reinsurers — the companies that provide financial backstop coverage to primary insurers — are facing mounting global losses from natural disasters. Industry analysts warn that another major Atlantic storm could prompt further reinsurance price hikes in 2025 renewals, increasing costs for Bahamian insurers and, ultimately, policyholders.
