Avia Collinder, Business Reporter
The Insurance Association of Jamaica (IAJ), which started tracking the employers liability market segment for the first time last year, says premium income at half year ending June has already surpassed revenue for the full calendar year in 2012.
But, claims are rising much faster, accor-ding to new data from the association.
IAJ General Mana-ger Orville Johnson said the 2012 data was not segregated by months, preventing an analysis of the half-year performance.
Premium income from January to June 2013 has already outpaced last year's full intake by J$46 million or 37 per cent, while claims are already J$54 million or 67 per cent higher, the numbers indicate.
Employer-liability policies cover employers for loss due to workplace negligence.
Peter Levy, Managing Director of British Caribbean Insurance Company (BCIC), says rising premium income in the category might be predicated more on increased cost of coverage rather than higher take-up of policies.
"A development in the last few years is that there are more people who have been willing to sue their employers. The cost of coverage is therefore going up," said Levy, who is also vice-president of the IAJ.
The employer-liability market represents less than one per cent of the general-insurance sector, according to the IAJ.
A worker may claim compensation from an employer for personal injury from accidents on the job, under the Workers Compensation Act.
If liability is proven, compensation is payable to the worker, or to his/her beneficiary where the accident results in fatalities.
Last year, there were 1,306 employer-liability policies, while total coverage amounted to J$12 billion, representing 0.6 per cent of total coverage for the general-insurance sector, said Johnson.
There were 2,465 employer-liability claims valued at J$81 million for the full year.
"Policies are usually bought by manufacturing companies; companies with machinery companies, and whose working environments are prone to risks such as wet floors," Johnson said.
For January to June 2013, employer-liability gross premiums totalled J$173 million, which has long surpassed the J$126.7 million of premiums for all of 2012.
Gross claims were J$135 million at HY2013, a number which is already near double the J$81 million for calendar 2012, according to IAJ data.
While premiums are rising, Levy does not believe take-up of policies will improve significantly for a product which is not mandated by law, as with motor-vehicle insurance.
"In general, in the context of the kind of economic conditions, which we have been seeing for some time, companies are making tough decisions in terms of what kind of expenses they are prepared to take on," said the BCIC head.
"Most of the big companies do buy, but another element might be that people underestimate the risk attached."
Some companies, he noted, will only buy employers-liability insurance when it is stipulated as a requirement to secure certain contracts.