KINGSTON, Jamaica – President and CEO of Marathon Insurance Brokers Limited Levar Smith, is calling for major policy reforms to strengthen resilience within Jamaica’s Special Economic Zones (SEZs) warning that the country’s insurance gap leaves billions of dollars in disaster losses uncovered.

Smith made the call while addressing the Special Economic Zone Authority (SEZA) BAC Accelerator Series  on Wednesday under the theme ‘From Recovery to Resilience: Proactive Policies, Incentives, and Best Practices for Sustainable Investment in SEZs’.

Drawing on analysis following Hurricane Melissa, Smith noted that the storm caused an estimated US$12.2 billion in damage, equivalent to 56.7 per cent of Jamaica’s gross domestic product, but only about US$4.16 billion was covered through a mix of sovereign risk instruments and private insurance.

He explained that sovereign coverage totalled US$662 million, including payouts from the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a World Bank parametric catastrophe bond, and contingency funds, while private market insured losses were estimated at US$3.5 billion.

Smith pointed out that combined, this represents roughly 34 per cent of total losses, leaving an uncovered protection gap of approximately US$8 billion.

“The 34 per cent coverage figure is more accurate than earlier reports suggested but it still means that two thirds of all losses fell on the uninsured,” Smith said, noting that the burden was unevenly distributed.

He pointed out that hotels were almost fully insured, while most Jamaican homeowners had little to no coverage.

Smith highlighted that insurance penetration varies sharply across sectors.

He noted that large commercial properties are generally insured but often below true replacement value, while small and medium-sized enterprises have insurance uptake rates estimated between five and 20 per cent.

Smith said among homeowners, only about 20 per cent carry insurance, with the majority underinsured.

Turning to SEZs, he warned that their risk exposure extends beyond physical damage, as these zones depend heavily on uninterrupted operations.

Smith warned that disruptions to ports, airports and logistics hubs can lead to immediate income loss and trigger wider economic effects, including job losses, reduced consumer spending and contraction in tourism.

He referenced a regional case in which a major Caribbean port sustained hurricane-related losses estimated at between US$12 million and US$20 million. He said recovery within 18 months was made possible through strong pre-loss planning, including updated property valuations, sufficient business interruption coverage, and structured claims processes backed by international reinsurers.

Against this background, Smith urged policymakers to implement a series of reforms aimed at embedding resilience into SEZ operations.

These include mandatory minimum insurance standards tied to current property valuations, linking tax incentives to adequate insurance coverage, and the creation of a SEZ catastrophe pool to reduce premium costs.

He also called for increased adoption of parametric insurance, particularly for small and medium-sized enterprises, mandatory business continuity planning aligned with insurance programmes, and annual professional valuations for higher-value properties, especially in light of construction cost increases of 35 to 45 per cent following the hurricane.

Smith argued that strengthening the insurance framework within SEZs is critical to maintaining investor confidence and safeguarding economic stability.

“Investors do not just choose tax incentives they choose stability,” he said, adding that a well-governed insurance system could become one of the country’s strongest competitive advantages.