British Caribbean Insurance Company Limited, BCIC, will refund a portion of April’s premium to holders of its public passenger vehicle, PPV, Diamond Max and private motor insurance next week.
The move, which is expected to cost BCIC about $50 million, marks a first for insurance companies in Jamaica and comes in response to historic-lows in motor vehicle accidents in light of tightening restrictions to limit the spread of COVID-19.
“We looked at the claims in April and those had lower claims than we’d normally run at. The other motor products didn’t have that kind of effect,” Managing Director of BCIC Peter Levy told the Financial Gleaner.
Customers of BCIC’s Diamond Max private motor insurance, which covers individuals 60 years and over, will get a refund of 40 per cent on April’s premium, while the PPV and private motor insurance clients refund amount will be 15 per cent to the month’s premium.
“That’s because what we saw was people over 60 years barely had any accidents in April, which I guess is not surprising, considering that the Government ordered everybody over 65 to stay home,” Levy said.
Whether insurers can get another refund next month is solely up to insurance claims remaining at historic lows.
“The premiums that we charge people, we would have never had contemplated this happening. But with all of the economic fallout from the pandemic, we figured that we should give people a credit for the fact that the risk was just that much lower. So it is based on actual numbers in April. What happens in the future, we don’t know yet,” Levy said.
Aside from a refund for specific insurance policies, BCIC has also extended payment dates, waived late fees, and empowered their employees to work with each customer on a case-by-case basis to provide support to customers negatively impacted by the pandemic.
BCIC says its decision to support its customers during this time will be cushioned by its “solid results” in 2019.
The company also says it’s not contemplating any reduction in its workforce, about 50 per cent of which now work remotely.
“We have obligations that we must continue to meet, and at the forefront is that is our team members. At the same time, some of our customers are going through a very tough time as a result of the pandemic, and we are trying to find the balance between making sure that we stay whole,” said Levy.
“But it’s not a question of giving up the least amount that you can get away with, but rather giving the most amount that you can in a situation like this,” he said.
The insurance company has kept the majority of its branches open for business.
However, the general insurer is also having discussions around changes it may be forced to make after COVID-19 has passed.
Those discussions, according to Levy, take into consideration more employees working from home, and the upgrading of its platforms to do more business electronically, having seen a significant uptick in online premiums since March.
“We have been trying to form a view of what the future will look like, and we believe that some people that are working from home now will continue to work from home, even after COVID has passed,” he said.
“Typically, our customers own buildings and all the office equipment is in one place, and that’s how they insure it. If they are operating in an environment where 30 per cent of staff is working from home, does that mean that they will have office equipment distributed throughout the country? What does that mean in terms of their insurance needs? It may result in us having to change some of our policies,” Levy noted.