V.I. Property Insurance Squeeze May Not Loosen Soon

Market forces limiting the availability of property insurance in the Virgin Islands and raising prices could begin to level off, officials told the Senate Monday. But it hasn’t happened yet.

A so-called hard market, where large insurance companies charge more to cover potential losses by smaller insurance companies, started in 2019, said Glendina Matthew, director of the Division of Banking, Insurance and Financial Regulation, part of the Office of the Lieutenant Governor. It was the first hard market since 2001-2004, after which rates softened.

The cyclical nature of these markets can be difficult to predict but can mirror the likelihood of major insurance-payout events, like natural disasters, Matthew told the Committee on Housing, Transportation and Telecommunications.

“Climate change and global warming continue to have a significant impact on our weather, particularly as it relates to the frequency and intensity of catastrophic events,” she said. “As a result of catastrophic events such as hurricanes Irma and Maria and other weather-related activities, reinsurers have been declining or limiting the amount and types of risks they will undertake, which in turn has limited insurer’s ability to write new and renewal coverage.”