Property Insurance rates to increases by 15% - 30% in 2023

The Cayman Islands Insurance Association (CIIA) is notifying residents of the Cayman Islands that they should anticipate increases in their property insurance premium rates in 2023.

The basic principle of insurance and reinsurance is the pooling of all premiums received to pay for the claims of those that have suffered losses. Although we, in the Cayman Islands, have been fortunate to avoid any major hurricane losses since Hurricane Ivan in 2004, we fall into the same reinsurance pool bracket in the Caribbean and face similar risks.

As a result, the market is requiring a necessary increase in premium rates due to the following factors:

Pricing: Pricing models have been updated to take into account various factors such as

climate change and the increasing cost of secondary non catastrophe perils. (other than hurricane, earthquake, tsunami, etc.)

Capacity: Reinsurers are providing less insurance; therefore, the cost of available reinsurance is escalating. Reinsurance is vital to the local insurance market.

Inflation: The impact of inflation is even more prevalent in the Caribbean due to supply chain complexities and cost of transport. Inflation will impact property values and the cost to settle claims. This will result in insurance rates being readjusted upwards to allow insurers the ability to continue to pay for future claims.

These increases are likely to be between 15% to 30% dependent on various factors such as type of construction, protections, property location and elevation.

Should property owners have any question, they should contact their local insurance representatives.