Six months after Hurricane Melissa tore through western Jamaica, according to The Jamaica Observer, many homeowners and business operators are still waiting for their insurance claims to be settled. Reports of frustration are understandable. Families need funds to repair roofs, replace damaged contents, and restore normal life. Businesses need working capital to reopen, rehire staff, and rebuild damaged premises. When claims are delayed, recovery slows.
But Jamaica’s experience is not unique. Around the world, countries exposed to hurricanes, floods, and other natural disasters often face the same problem: after a major catastrophe, insurance systems can become overwhelmed. One important lesson is that delays are not always caused by a lack of money. In many cases, the real bottleneck is the insurance system’s inability to process thousands of claims at once.
A personal disclaimer: today’s article is not a public relations job that I undertook to burnish the insurance industry’s image. If you read to the end, you will see that the problem that is being experienced by some policyholders occurs globally. Additionally, general advice will be offered to avoid the challenges in future.
A common international problem
Countries like Jamaica in size or stage of development have faced comparable difficulties.
After Hurricane Dorian devastated The Bahamas in 2019, many policyholders experienced long waits for settlements. Some homes were total losses, title documents were missing, and contractor shortages slowed rebuilding.
Dominica, after Hurricane Maria in 2017, also faced a difficult claims environment. The storm caused widespread destruction, and a small domestic insurance market struggled to handle the volume of losses quickly.
In the Philippines, following Typhoon Haiyan, infrastructure damage made inspections difficult, and many people had lost key documents.
Even wealthy countries are not immune. After hurricanes such as Katrina, Ida, and Ian in the United States, some claims remained unresolved for months or even years, especially large commercial disputes.
The pattern is clear: once losses become huge enough, even sophisticated markets can struggle.
Why claims take so long
There are several recurring reasons. First, there may not be enough loss adjusters, engineers, or claims specialists available immediately after a disaster. Every damaged property cannot be inspected all at once.
Second, roads, electricity, and communications may be disrupted, making it harder to reach affected areas.
Third, rebuilding costs often rise sharply after a disaster. Materials become scarce, labour costs increase, and disagreements emerge over whether a property was adequately insured.
Fourth, business interruption claims are especially complex. Calculating lost profits and future earnings takes time.
Documents may also be lost, ownership records are unclear, and incomplete claim forms can delay the process.
Finally, there may also be failure of regulatory oversight in designing and testing plans to manage claims during disasters.
Jamaica’s strength: Funding was available
One encouraging sign is that Jamaica entered the crisis on a macro level with stronger financial protection than many countries.
The island benefited from reinsurance support, which helps insurers absorb very large losses. Jamaica also received funds from regional and international disaster financing mechanisms, including the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and a catastrophe bond arranged through the World Bank.
This matters because it suggests the core issue may not have been lack of cash in the system, but rather the operational challenge of handling claims quickly enough. In simple terms: the money pipeline existed, but the claims pipeline became congested.
What other countries have done
Around the world, regulators and insurers have introduced reforms to improve disaster claims performance.
One approach is to set clear service timelines. For example:
- Claims acknowledged within 48 hours
- First contact with customers within a few days
- Regular progress updates
- Payment soon after coverage is confirmed
Members of the local industry, it appears, have not developed a common approach to deal with a common problem. Why not?
Another reform is public reporting. Regulators can require insurers to publish monthly data showing:
- Claims received
- Claims paid
- Claims still outstanding
- Average settlement times
- Complaint volumes
Transparency creates pressure to improve performance and reassures the public. Technology is also helping. Some insurers now use drones, satellite imagery, video calls, and mobile apps to inspect damaged properties more quickly.
Several markets also allow interim payments — partial cash advances made before the final claim is settled. This can be vital for families needing urgent repairs or businesses trying to reopen.
Lessons for Jamaica
Jamaica already has a relatively developed insurance market by regional standards. The next step may be to focus less on solvency alone and more on customer outcomes after catastrophes. I have been recommending this for many years but none of the folks at the Financial Services Commission have paid me any attention. I have reached out to the commission’s head Lt Colonel Keron Burrell on at least three occasions, but he has never returned my calls.
The regulator must consider a dedicated catastrophe claims code requiring faster communication, regular updates, and published claims statistics during national emergencies.
The insurance industry could also create a reserve pool of regional adjusters and engineers who can be deployed rapidly after a storm. Small island states often do not have enough specialists domestically to meet sudden surge demand.
Another useful reform would be stronger annual reminders to customers about underinsurance. Many people insure homes or businesses for outdated values and only discover the gap after a loss. On the other hand, one policyholder told me recently that she tried to update the sum insured on her house because of the approaching hurricane season and she was turned down.
What policyholders can do
Consumers also play an important role in speeding up claims. After a storm, policyholders should notify insurers or brokers immediately, even if the full damage is not yet known. They should photograph all damage, keep receipts for emergency repairs, and secure the property to prevent further loss.
Claim forms should be completed carefully and returned with all requested documents. It is also wise to ask for a claim number, the name of the assigned adjuster, and expected next steps.
If a claim appears stalled, written follow-ups can help. Brokers can often assist in escalating matters.
Perhaps most importantly, Jamaicans should review insurance sums insured every year to reflect current rebuilding costs.
The bigger picture
Insurance plays a vital national role after disasters. It helps households recover faster, keeps businesses alive, and reduces pressure on government finances. When claims move slowly, recovery slows. Shops stay closed longer, workers remain displaced, and reconstruction drags on.
Hurricane Melissa may prove to be a turning point. Jamaica has already shown strength in disaster financing at the national level. The next challenge is achieving excellence in disaster claims delivery. The lesson from around the world is simple: before the storm, capital matters. After the storm, speed matters.
If Jamaica can combine strong funding with faster, fairer claims handling, it could become a regional model for insurance resilience in an age of rising climate risk. Insurers have known about these problems for many years but have not developed a comprehensive plan to solve them. The regulator cannot escape culpability. The granting of tax breaks to close the protection gap as, an industry executive argued, is a ‘hell-no!’
If you require assistance managing risks or solving insurance problems, Cedric E. Stephens offers free counsel and advice. To obtain information and counsel, please write to The Business Editor at business@gleanerjm.com or contact Mr Stephens directly at aegisja@gmail.com. Letters and e-mails will be edited for clarity and length.
