by Marlon Madden
A significant number of vehicular accidents in Barbados can be avoided if people would stop driving and using their cellphones, and if they would maintain a safer distance between them and the vehicles they are behind.
So says Chief Executive Officer of Trident insurance David Alleyne, who told Today’s BUSINESS that residents had the power to trigger the lowering of rates for motor vehicle insurance premiums by lessening the number of accidents they are involved in.
At the same time, Alleyne said property insurance rates have stabilised in recent years, following a downward trend. Premium rates for motor vehicle and property are based on several factors, one of the major ones being the value of the asset. This rate can experience fluctuation over time, with the main cause for an increase in motor vehicle premiums being accidents.
Property insurance rates could increase if there is a major impact from a disaster, for example.There have been sustained complaints in Barbados over the years about the cost of insurance rates. However, in an interview with TODAY’s Business, Alleyne weighed in on the matter saying: “People say the motor vehicle rates are too high but I am not sure what that means because rates are commensurate with claims load”.
“Insurance companies don’t have rates high because they want to make money. The rates are there because on average you need that rate to pay claims. So if the rates are high stop hitting the cars,” he said. “There are two aspects to motor vehicle accidents – there is the damage to the vehicle and the personal injury. My point is that the majority of accidents in Barbados that happen every day are rear-enders.
That means damage to both vehicles, sometimes to the extent of being written-off, and whiplash injuries. That causes a substantial load to the overall premium costs,” he explained. Alleyne said he was convinced that motor insurance rates would come down if people decided to stop using their cellphones while driving and leaving themselves more space between their vehicle and the one in front of them.
“Get somewhere a little later and stop running in the back of cars constantly and that would reduce the claims load in our country and allow premium rates to drop,” he said. “People drive too close up under the car in front of them all the time and then cannot stop, and then say ‘the man stop on me’. I have even seen people run in the back of one another in a line and that is caused by using a phone. So if premiums are too high, stop driving too close to people in front of you,” insisted Alleyne.
Today’s BUSINESS understands that there are around 8,000 reported vehicular accidents in Barbados annually, of which some 6,000 are classified as fender benders and the others are considered more serious accidents. Turning his attention to property insurance premiums, Alleyne said rates for that segment of the market had stabilised over the past several years after they had fallen.
In fact, he said, the region’s reinsurers – the companies that provide financial protection for the insurance companies because the risks are too large for them to handle on their own – believe rates should start going up. The Caribbean is subjected to damage from three main natural disasters – hurricanes, volcanoes and earthquakes – and the support from reinsurers for the region in the event of those disasters are said to be significant, around 80 per cent.
Asked if individuals and companies should expect premiums to increase any time soon, Alleyne said: “I can’t say that they will go up, but I certainly can’t expect premium rates to fall”.
Alleyne explained that a major catastrophe often resulted in an increase in rates, pointing to the example in the northern Caribbean region in recent years, following several hurricanes.
“If there is a significant event in our part of the Caribbean the rates will go up because reinsurers consider them to be too low,” added Alleyne.
marlonmadden@barbadostoday.bb
