Insurers: ‘Everyone will pay’ if storm cover unaffordable Pilots join demand for sanctions push against Bahamas airlines

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

US PILOTS are now urging federal authorities to impose sanctions on the ability of Bahamian airlines to access their market unless this nation “immediately ends the collection of these egregious” air navigation fees.

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

BAHAMIAN insurers yesterday warned that “everyone will have to pay” if hurricane coverage becomes increasingly unaffordable with the issue representing a growing public policy “dilemma” for the Government.

Property and casualty underwriters told Tribune Business that an ever-escalating burden will be imposed on the Public Treasury in the aftermath of major storms if growing numbers of homeowners and businesses are unable to afford skyrocketing premium prices for all-perils catastrophe coverage.

This was exposed in Hurricane Dorian’s aftermath, with millions of taxpayer dollars still being spend to effect repairs to thousands of uninsured homes, and senior executives said the industry and government now need to “sit at the table” and explore how they can increase coverage penetration at a time when the Bahamas Insurance Association (BIA) has warned global reinsurers may demand “substantially increased rates” in this nation and wider Caribbean.

Anton Saunders, RoyalStar Assurance’s managing director, told this newspaper that the underwriter had sought to mitigate the 20-30 percent hike in reinsurance rates by absorbing 5-7 percent of the increase itself.

However, despite this the company had no choice but to increase its catastrophe insurance rates for property by around 15 percent in 2023.

“We did not pass all of our costs on to our clients,” he explained. “We decided to absorb about 5-7 percent that we are going to eat internally. Our margins are reduced to absorb some of the cost. We encourage all our clients to review their portfolio to see where they can take on more risk themselves if they can afford to

The Airline Pilots Association thus added its weight to calls by US airlines for Bahamian carriers to be barred, or “curtailed”, from flying to the US as a “regrettable” next step given that this nation’s government is unlikely to be persuaded to adjust charges they allege are “unjust, discriminatory and anti-competitive”.

Captain Jason Ambrosi, the Association’s president, in a January 20, 2023, letter to the US Department of Transportation, gave Airlines4America’s full-scale pressure campaign against The Bahamas’ air navigation services fees his complete backing.

“Air Line Pilots Association International (ALPA) strongly supports the complaint of the members of the Air Transport Association of America (doing business as Airlines4America) against The Bahamas for ‘astronomical’ air navigation service charges under the International Air

SIMON WILSON

Transport Fair Competition Act,” he wrote.

“The Department should take the steps that Airlines4America requests because they would advance key public interest factors in the aviation statutes. As the National Air Carrier Association points out in its answer, which ALPA also supports, the Bahamian service charges are unjustified because the US Federal Aviation Administration provides 75 percent of The Bahamas’ air traffic services; Cuba provides the rest.

“In Airlines4America’s estimation, the charges that The Bahamas expects US airlines to pay are likely five times in excess of the actual costs. As a result, US carriers pay twice: Once to the Federal Aviation Administration (FAA) trust fund for these services, and again to The Bahamas for the same services.