By VERNON CLEMENT JONES, Guardian Business Editor, vernon@nasguard.com

As an ailing economy forces many Bahamians to claw back on spending, miss car payments and, more unfortunately, default on mortgage payments, most seem less willing to forgo another monthly expense — their insurance premiums. The country's largest health insurer is pointing to only a meager increase in the number of surrenders during the first six months of the year relative to the year-ago period. The term, of course, refers to the voluntary cancellation of a policy by a customer, usually to transfer over to another carrier or to end coverage altogether. Given stagnant or weakening wages this year, a glut of the latter would seem the most likely outcome. That's not the case ColinaImperial CFO Cathy Williams tells Guardian Business. "For surrenders, the figures were actually only slightly higher

for the first six months in comparison to the same period in 2007 being an increase of approximately 0.5 percent," she said Tuesday.

That retention seems largely borne out by newly released data for the three months ended June 30, 2008. Premium revenues grew $1.63 million from the corresponding 2007 period. At least one other insurer is pointing to its own success in retaining, indeed, growing premium income.

A large driver of that phenomenon is the value growth in the average policy, in some cases making up for actual decreases in the number of policies for an insurer. It could in part explain the gross revenue growth at Colina even as surrenders in fact grew. The commitment policyholders continue to make, despite the vagaries of the employment market, may also be a reflection of the aging population and the real need to keep medical coverage at almost all and any cost. While a universal health care program was last year passed by the legislature, it has yet to be enacted. The current administration is instead pledging to introduce a national drug plan to bring a schedule of medications closer within reach of Bahamians. It is also looking at building a new hospital for New Providence using the proceeds

of a pending sale of a BTC stake.

Neither of those strategies will likely, in and of themselves, speed up surrender growth for

local insurers. Still, the real growth in the number of debilitating illnesses cropping up among older

Bahamians will likely keep payouts high for all health insurers in this mature marketplace. While Colina is now reporting a drop in benefit payouts for the six months ended June 2008, they nonetheless represent a whopping 69.7 percent of net premium revenues.