me problem

of reinsurance

Like insurance companies

around the Pacific, Progressive Insurance in Western Samoa is facing its share of problems, which are main ly to do with the costs of reinsurance.

General manager Solomone Suifua said reinsurance took most of the premiums paid on each policy. This was about 60 cents from every dollar so insurance com panies were left with only 40 cents for the dollar.

“With reinsurance taking so much from the premium, we are left with very little to operate from and this can sometimes be difficult,” he said.

Suifua said the cost of reinsurance in Western Samoa escalated by about 50 per cent after cyclones Ofa and Vau hit the

country in 1990 and 1991 respectively.

“Because the risk was so high, reinsur ance just sky rocketed and we could not do anything about it.

“A long period has passed since the two cyclones yet the cost hasn’t come down why, we don’t understand.

“There was hope that it would come down later in tlhe year but after the two cyclones which hit Fiji and Tonga earlier

this year, things look highly unlikely.

“All we can wish for now is that the cost does not increase any further or we will not be left with anything.” ■

Coverage in the Pacific takes into consideration natural disasters, such as cyclones