2024 Hurricane Season Economic Impact: Assessing Beryl’s Toll on Caribbean Property and Insurance Markets

Publication Date: 3 October 2024  |  Coverage Period: 3 September – 2 October 2024

Morning Briefing

• The 2024 Atlantic hurricane season, which officially closes on 30 November, has so far been dominated by the extraordinary early-season activity of Hurricane Beryl in July; the September period brought additional tropical storm activity but no further major landfalls in the main Caribbean island arc.
• Caribbean Catastrophe Risk Insurance Facility (CCRIF) finalises its Beryl-related government payouts, with total parametric disbursements to affected member governments reaching approximately US$52 million, the largest single-event payout in the facility’s history.
• Jamaica’s Tourism Product Development Company reports that the island’s resort infrastructure has been substantially restored following Beryl, with the north coast resorts operating at normal capacity ahead of the upcoming winter season.
• Re-insurance analysts at Gallagher Re and Guy Carpenter estimate that insured losses from Hurricane Beryl across the Caribbean total approximately US$2.5-3.0 billion, making it one of the more costly Caribbean hurricane events of the past decade.
• The Dominican Republic records its strongest September tourism performance on record, with arrivals from North America and Europe both setting monthly highs and advancing bookings for the October-December quarter looking robust.
• Barbados announces a revised economic growth forecast of 4.2% for full-year 2024, down from an earlier projection of 5.1%, with the revision attributed partly to Beryl-related disruption in Q3 and partly to construction cost pressures affecting new hotel development.

The 2024 Atlantic Hurricane Season: An Assessment at the Three-Quarter Mark

The 2024 Atlantic hurricane season began with a level of pre-season anxiety that proved well-founded, though not in the way that some of the more alarming forecasts had suggested. NOAA’s record-high seasonal forecast, issued in May and reflecting extraordinarily warm Atlantic sea surface temperatures, predicted an exceptionally active season with the potential for numerous major hurricanes. What actualised in the first three months was somewhat more geographically concentrated: Hurricane Beryl in early July was an event of historic intensity and timing — the strongest July hurricane ever recorded — but the subsequent peak of the season through August and September brought fewer direct Caribbean landfalls than many had feared.

For Caribbean property markets, the season’s economics are therefore defined overwhelmingly by Beryl. The insured loss estimates of US$2.5-3.0 billion make it a significant event in the historical record of Caribbean hurricane losses, though far short of the catastrophic totals associated with Irma (2017) or Maria (2017). Total economic losses — including uninsured and underinsured property, agricultural losses, and infrastructure damage — will substantially exceed the insured figure, with some analysts placing the total economic cost for the Caribbean at US$5-7 billion when reconstruction costs and lost output are included across all affected territories.

The geographic concentration of Beryl’s impact — most severe in Grenada’s Carriacou, St Vincent’s Grenadines, and parts of Jamaica — means that the macro-Caribbean economic data have been affected but not overwhelmed. The region’s two largest economies, the Dominican Republic and Jamaica, have both sustained their growth trajectories through the year. Smaller island economies most directly struck, particularly Grenada, have seen more material GDP impacts, with the Eastern Caribbean Currency Union’s collective growth outturn for 2024 likely to come in somewhat below earlier projections as a result.

Caribbean Property Insurance: The Beryl Reckoning

The Caribbean property insurance market’s response to Hurricane Beryl represents one of the most consequential developments for Caribbean real estate markets in 2024 and potentially well beyond. The CCRIF’s US$52 million in parametric payouts to affected governments — while significant and delivered with impressive speed — represents only a fraction of the total fiscal reconstruction bill facing governments. The gap between parametric government-level insurance and the actual cost of rebuilding public infrastructure and supporting displaced households underscores the need for more comprehensive coverage solutions.

At the private residential and commercial level, the Beryl claims experience has laid bare the chronic underinsurance that characterises Caribbean property markets. In Carriacou, post-storm assessments found that a significant majority of residential properties either had no wind coverage at all or held policies with replacement values far below the actual cost of rebuilding at current materials and labour prices. This gap between nominal and actual coverage — sometimes called underinsurance-at-time-of-loss — is a structural problem across Caribbean property insurance that has been worsening as construction costs have risen without corresponding adjustments to insured values.

Reinsurance market dynamics are amplifying the pressure on Caribbean primary insurers. Gallagher Re and Guy Carpenter data suggest that Caribbean reinsurance capacity — the pool of international capital that backs Caribbean primary insurers’ ability to pay large claims — has been tightening since 2017’s Irma/Maria season, with each subsequent active hurricane year adding to the cost of reinsurance. Beryl’s losses will further increase Caribbean reinsurance premium costs, which will flow through to higher prices for property owners at their next renewal. The structural question of whether Caribbean real estate can remain insurable at commercially viable premiums as the climate intensifies is one that regulators, lenders, and governments are beginning to confront more directly.

Tourism’s September Recovery: Forward Bookings Encourage

September is typically a quieter month for Caribbean tourism — the tail end of the summer season before the pre-winter buildup in October — and 2024’s September data are therefore somewhat harder to interpret relative to the Beryl impact. The Dominican Republic’s record September performance stands out as a positive signal, reflecting the DR’s success in positioning itself as a genuine year-round destination capable of drawing visitors even in the shoulder season. Jamaica’s September arrivals were softer, partly reflecting some lingering hesitation from travellers who may have rescheduled away from the island following Beryl’s July strike.

The forward booking data for October through December are, however, encouraging for the Caribbean as a whole. Major travel booking platforms report that Caribbean winter bookings are tracking ahead of the same period in 2023, with the Bahamas, Jamaica, and the Dominican Republic all registering strong demand. The resilience of advance booking demand despite Beryl suggests that the consumer psychology effect of the hurricane — concerns about safety and infrastructure readiness — has been largely addressed by the speed of recovery and the active marketing campaigns launched by Caribbean tourism bodies in August and September to assure travellers of the region’s readiness to welcome visitors.

For Caribbean property investors whose returns depend on short-term rental income, the recovery trajectory of tourism is the single most important economic variable to monitor. The September-October data suggest that the feared prolonged depression of Caribbean tourism demand post-Beryl is not materialising. This is good news for rental yields and, by extension, for the valuations of tourism-linked property across the region. The winter season that begins in earnest in November will provide the clearest evidence of whether Caribbean tourism demand has fully recovered or whether some residual Beryl caution persists.

Property Resilience: Which Markets Have Held Value Best Post-Beryl?

Three months after Beryl struck, it is possible to begin making a preliminary assessment of how Caribbean property values have responded to the storm event. The picture is, perhaps predictably, differentiated by geography and market segment. In Carriacou, the small island community most directly devastated, property values are complex to assess given that so many structures were damaged or destroyed; the market for undamaged or repaired properties has been limited, and several pre-storm sales that were in progress at the time of the hurricane have been renegotiated or abandoned.

In the larger markets — Jamaica, Barbados, and the Dominican Republic — the picture is of property values that have broadly held or continued to appreciate despite the storm’s disruption. Barbados’s high-end coastal market, where properties range from several hundred thousand to multi-million US dollars, saw transaction activity pause briefly in July and August but has resumed as buyers and sellers recalibrated. The premium segment’s resilience reflects in part the insulation of wealthy buyers from immediate financial pressure, and in part the reality that these markets are driven by long-term lifestyle and investment motivations that a single weather event does not fundamentally alter.

Jamaica’s property market data for Q3 2024 — which will not be fully compiled until later in the year — are expected to show a modest dip in transaction volumes in the immediate aftermath of Beryl followed by recovery. Anecdotal reports from Kingston and the north coast suggest that activity has picked up through September, with sellers and buyers who had been waiting for clarity on the storm’s aftermath now proceeding with transactions. The structural demand drivers in Jamaica’s property market — diaspora purchasing, tourism-linked investment, NHT-supported first-time buying — remain intact, providing a floor to values even in the face of short-term disruption.

Barbados: Revised Growth Outlook and the Longer-Term Investment Case

Barbados’s downward revision of its 2024 GDP growth forecast to 4.2% from 5.1% is a modest adjustment that should be read in context. The original 5.1% projection reflected a buoyant pre-Beryl outlook that itself incorporated optimistic assumptions about tourism growth and construction activity. The revised figure still represents solid growth for a small island economy, and it is broadly consistent with the region-wide pattern of slightly lower-than-projected growth following the storm disruption. The primary drag on Barbados’s growth has been the temporary reduction in visitor arrivals following Beryl and the associated services revenue shortfall in July and August, combined with some slippage in hotel construction project timelines caused by storm damage and supply chain disruption.

Barbados’s longer-term investment case remains structurally sound. The island’s economic reform programme under Prime Minister Mia Mottley, which included the 2018 restructuring of public debt, an expanded digital economy strategy, and the positioning of Barbados as a sustainability-focused destination through the ‘2030 Barbados’ vision, has delivered genuine improvements in macroeconomic fundamentals. The country’s successful negotiation of an IMF programme and its subsequent graduation to market access are markers of fiscal credibility that underpin investor confidence in a way that was simply not present a decade ago.

Caribbean Leaders This Month

Most Significant Insurance Development: The CCRIF’s US$52 million in post-Beryl parametric payouts represents a landmark demonstration of regional disaster insurance working at scale, even as the gap between those payouts and total reconstruction costs underscores the need for deeper coverage solutions.

Strongest Tourism Recovery Signal: The Dominican Republic’s record September tourism performance, achieved in a traditionally quiet shoulder month, confirms the DR’s emergence as the Caribbean’s most resilient all-year-round tourism destination.

Most Resilient Property Market: Barbados, where the revised economic forecast is modest in its downward adjustment and where property transaction activity has resumed across segments with a speed that reflects the underlying strength of demand from both local and international buyers.

Most Important Policy Question: The Caribbean property insurance underinsurance gap — starkly exposed by Beryl — is the defining policy challenge for Caribbean housing markets in the near term, with solutions requiring coordinated action from governments, regulators, insurers, and multilateral institutions.

Most Encouraging Forward Indicator: Caribbean winter tourism advance bookings tracking ahead of 2023 levels across Jamaica, the Bahamas, and the Dominican Republic, signalling that consumer confidence in the Caribbean as a destination has not been durably damaged by Beryl.

Best Economic Fundamentals Story: Barbados, whose reform-driven macroeconomic improvement over the past five years is providing a buffer against the short-term storm impact and sustaining investor confidence in the island’s long-term trajectory.

Overall Regional Standout, September 2024: The Dominican Republic earns this recognition for its consistent economic momentum through a hurricane season that has tested Caribbean resilience, with tourism, construction, and investment all continuing to perform strongly despite the regional disruption caused by Beryl.

Looking Ahead

The Atlantic hurricane season formally closes on 30 November, and as the Caribbean moves through October toward the season’s end, the mood in property and investment circles is one of cautious relief. The worst feared outcome from what was predicted to be an exceptionally active season — multiple catastrophic landfalls across the major Caribbean destinations — has not materialised. Beryl was devastating for those in its direct path, but the season has not delivered the cascading series of major storms that the record sea surface temperatures had many expecting. The approaching end of the formal season will provide some psychological relief to property owners, insurers, and investors alike.

The medium-term insurance question will not go away with the end of the 2024 season. Reinsurance renewal discussions for the 2025 season will begin in earnest in the coming months, and the Beryl experience will be front and centre in those conversations. Caribbean primary insurers, facing the dual pressure of rising reinsurance costs and regulatory pressure to maintain coverage availability, will be navigating a challenging market environment. Property owners and investors should begin early discussions with their insurance advisers about what the 2025 renewal environment is likely to look like and whether their current coverage levels adequately reflect current replacement costs.

For those considering Caribbean property investment, the final quarter of 2024 presents what may prove to be an advantageous entry point. Values in the most affected markets have not fallen dramatically, but some of the froth of the immediate pre-Beryl period has been tempered. The approaching winter season, with its record advance bookings, will demonstrate whether the fundamental tourism-driven return potential of Caribbean property remains intact. All the indicators as October begins suggest that it does — and that the Caribbean’s property markets are demonstrating precisely the resilience that investors in the region have long claimed as a distinguishing characteristic of the asset class.

The Caribbean Property & Investment Review is published monthly and covers developments during the preceding calendar month. All factual statements reflect information publicly available at the time of publication.