Filed Under:Claims, Education & Training

Beyond Paradise: Evolving Risks in the Caribbean

'Island Culture' Considerations and Exposures

Crescent beaches, turquoise waters, palm trees rhythmically swaying in the warm trade winds, and luxurious resorts catering to your whims are the lures of a Caribbean visit. It is a carefree time to unplug, reconnect with family, and spend carefree hours lounging, touring, and dining. Far are the thoughts of our daily routines and the usual caution we carry during our working or homebound lives.

A Caribbean paradise simply has that effect on those of us lucky enough to travel there for vacation or for business, making us the envy of our colleagues. Thousands of American and European tourists and business visitors join the migrating flocks heading south for the winter. Waiting expectantly is an equal number of international corporate and local businesses. Having survived another austere off-season, there is hope tempered with recession economy fear, that it will be a season of positive metrics and margins.

There are important characteristics for consideration that are shared by many of them. They have what I call an “island culture.” They are generally very small land masses and therefore people tend to know one another or at least know about each other. Many are related to one another to some degree. Many have gone to school or work together. As a result, there are no secrets on the islands. If you have a private conversation in a restaurant you can be sure by the following day the information has spread throughout the community. Well-off residents generally know someone who is a local government official of one type or another. Favors are bartered, “grease payments” or petty corruption are a way of life and expected in order to get anything done. They have no vested interest in hurting the business or tourist trades by documenting crime occurrences, which would generate negative crime statistics. They are suspicious of one another, but united in their feelings that tourists and businesses “owe them” as a result of benefiting from their island.

This is the stage that is set for foreign businesses, visitors, and your insured interests alike. It is a stage dressed with diffuse poverty resulting from a lack of economic development and other factors that allows for high murder and serious assault rates. Armed robberies, sexual assaults, burglaries, and larcenies are prevalent and increasing. Businesses suffer from internal crime of every type known. The murder rate is as high as 30 per 100,000 people, as reported by many news periodicals including The St Thomas Source. For comparison, the USA and some European murder rates are 4.8*, and as low as 0.5* per 100,000 people, respectively. Serious corruption exists in many facets of the police and government and in many businesses. This means that civil litigation and criminal proceedings are severely slanted in favor of a citizen’s or island’s interests.

Add in all of the above problematic ingredients of Caribbean governance, business, and culture, coupled with the need for the drug cartels to develop new less risky distribution routes, and you have all of the ingredients that have made the Caribbean a new major drug importation route. The natural byproduct is gang warfare, serious violent crime, kidnap for ransom, formerly unheard of use of weaponry in street-crime, along with the associated official and business corruption.  

Many of the major global carriers no longer write primary standard risks in the Caribbean. This has been left to local non-standard companies and Lloyds syndicates; ditto for the banking sector. Yet, you can unintentionally face these difficult to manage risks.

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