The Barbados Consumer Empowerment Network (BCEN) is concerned about indications that increased insurance payouts for vehicular accident claims may result in higher premiums for automobile owners.
The consumer advocacy body is urging Government and insurance industry regulator the Fair Trading Commission to pay close attention to this development that it says “could disproportionately affect consumers and prevent certain groups from being able to afford insurance”.
It was responding to media reports in which president of the General Insurance Association of Barbados Randy Graham linked higher vehicular accident claims payouts to the possibility of higher insurance costs for consumers.
BCEN queried why insurance companies were “looking for rate increases at a time when consumers could hardly afford such increases”.
“From since last year BCEN has been tracking comments from the president of the General Insurance Association of Barbados, as he went about spreading the message and priming Barbadians for an increase in car insurance rates, linking it to the increase in the number of car accidents, and other increased costs incurred by insurance companies,” the organisation outlined in a statement submitted by executive director Maureen Holder.
“It cannot simply be the case that when financial institutions are faced with increased costs, they seek to recover costs from consumers as though consumers themselves are not facing similar financial circumstances with increased costs. This type of thinking . . . should be criticised or else the financial well-being of consumers will continue to deteriorate.”
BCEN said it was not accepting the call for a hike without scrutinising the justifications offered.
“Admittedly, while an increase in car accidents seems to be a justifiable reason for adjusting insurance rates, we cannot blindly accept this premise. BCEN is forced to ask: What was happening during the COVID-19 period? Are these proposed increases consistent with historical trends, or do they signal a sudden and significant shift? The consumers of Barbados need more answers and information,” the organisation said.
“We at BCEN are saying there are several factors that need to be considered before accepting any move to increase car insurance rates in Barbados, so as to ensure that consumers are not unduly burdened. For example, we must evaluate the potential impact of rate increases on consumers, especially considering the economic conditions and financial hardships that policyholders are already going through. “This is why we would need independent actuaries to do the analyses on the data provided by insurance companies in order to understand the correlation between the increase in accidents and the proposed rate hikes,” BCEN added.
