A local insurance executive has painted a frightening picture of a flattened business sector should the country be hit by a major hurricane or other natural disaster.
Chief Executive Officer of Lynch Insurance Brokers Gregory Rose told a disaster risk reduction seminar on Thursday that “too few businesses in Barbados are deploying effective risk mitigation strategies to ensure their long-term survival”.
Lynch said with an estimated 11 per cent of companies having business interruption insurance, the already struggling economy could be wiped out should disaster strike.
And even making provision for those who had begun to take disaster risk management more seriously following the devastation caused by last year’s powerful category five hurricanes, Irma and Maria, across several countries, Rose said “our wake-up call should have occurred decades ago”.
“We in Barbados are still playing catch up. Too many businesses have no disaster response continuity plan. Only 11 per cent of businesses in Barbados are buying business interruption insurance. We saw with the recent hurricanes your business will be down for extended periods,” he warned, adding that this could result in the closure of businesses by the time property settlement comes around.
Stressing that hurricanes were not the only risks, Rose lamented that businesses here were lacking a cohesive plan of action and insurance protection.
“This discussion is not just about hurricanes. Our supply chains are increasingly complex, the reliance on technology is paramount and the pace of business demands that we react quickly and adapt or be left behind,” he warned.
Addressing the seminar on the topic Reduce the Risk, Raise the Response, the insurance official said disaster risk management was a national security issue, and the authorities and business leaders should take it more seriously.
Vice President of the Barbados Chamber of Commerce and Industry (BCCI) Ezra Prescod also painted a troubling picture of the likely impact of natural disasters on businesses and the local economy, pointing out that with about 14 named storms for the upcoming hurricane season, businesses should not take it lightly.
In fact, Prescod told those gathered for the BCCI event at the Sandals Royal Resort that given the already difficult economic circumstances, a major hurricane could wipe out their entire operation if they were not prepared or able to quickly get back on their feet.
“We are faced with increased taxation, the economy is sluggish, we have of course, where unemployment is high, we have reduced disposable spending and that is just the tip of the iceberg.
“Most businesses today are struggling to maintain cash flows. So just looking at your market space, you are physically challenged just to make ends meet. So if you then take that and put a business interruption on that, ask yourself honestly, are you prepared to face that?” he asked.
Also recalling last year’s hurricane devastation, Prescod said he feared Barbados could not “take a hit even on the scale of Anguilla”.
Therefore, he urged companies to consider what was needed to quickly recover if hit by a major storm.
“If you can still keep your business running you have to figure out in an already reduced market space how to be more efficient, how to take things and make things better, given you have a reduced customer strength coming in and increased working capital demand,” he said.
Prescod also said the time had come for Government, the private sector, insurance companies and other stakeholders to construct buildings that can withstand strong hurricanes, and put systems in place to protect the island’s human resources.
“Our main thing is people services and if the people can’t survive what are we going to do?” he asked.