Businesses and homeowners will face higher costs for flood cover and such measures will continue until the insurance industry is satisfied that real steps are being taken by the authorities to correct defects in the drainage system.
This was the position outlined by the Insurance Association of Guyana (IAG) in an advertisement in yesterday’s Sunday Stabroek. It came on the heels of another statement that the IAG had issued on December 22, 2013 warning that flood insurance might have to be ended if the authorities didn’t take concerted efforts to prevent a recurrence of the flood that swept the capital on November 27th, 2013.
Yesterday’s statement by the IAG pointed to the subsequent flood of Tuesday, 14th January, 2014 as a recurrence of what it had warned about and said that it was a matter of serious concern to the industry.
Adverting to its December 22, 2013 statement, the IAG said that it had noted that the poor upkeep of drainage facilities and the culture of dumping garbage in drains and canals were the main causes of the frequent flooding especially of Georgetown and its environs.
It said what was particularly disturbing about the latest round of flooding on January 14th, 2014 was the admission by the authorities that several pumps needed to drain the city were not working. It said that of even greater worry was the absence of any assurance as to when they might be repaired.
The IAG also took a swipe at the state’s weather forecasting ability which has come under increasing scrutiny in recent years.
“With the rainy season set to continue for several weeks and our weather forecast capabilities virtually non-existent, the Insurance Industry has to prepare for more flood damage claims. It should be pointed out that insurable risks are subject to fortuitous occurrences and when an event leading to a loss is inevitable then the risk becomes uninsurable”, the IAG said. It lamented that the inaction of the “relevant authorities” in addressing this situation will soon cause the risk of loss by flooding to become uninsurable.
While the city council has control of large parts of the drainage infrastructure in Georgetown, it has argued for many years that it has been starved of funding and has been prevented from taking steps to raise its own revenue. In recent years, the Ministry of Public Works has taken independent steps to address flooding in the city.
The insurance industry in yesterday’s advertisement said that it will shortly advise policyholders of the new structure of underwriting measures pertaining to flood cover.
“These measures will impact businesses as well as private homeowners and will continue until the Industry is satisfied that meaningful action is being taken by the relevant authorities and the citizenry to correct the deficiencies” which have led to frequent and severe flooding.
In its December statement, the IAG had said that the flooding of November 27th , 2013 had seen damage claims in excess of $150m.
The ad was sponsored by the Demerara Mutual Life Assurance Society Ltd, Demerara Fire and General Insurance, Caricom General insurance Inc, GCIS Inc, Guyana Trinidad Mutual Group of Insurance Companies Ltd, Hand-in-Hand Life, Hand-in-Hand Fire, John Fernandes Insurance Services Limited, North American Life Insurance, North American Fire Insurance, Assuria Life and General (Gy) Inc and Guyana Insurance Brokers.
