Home' Trinidad and Tobago Guardian : March 3rd 2016 Contents MARCH 3 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
Most people view insur-
ance as a necessary evil.
They see the need for it,
but don t fully appreciate
the significance of the
industry in terms of its
contribution to their personal lives and the
Most people are not aware of the fact that
every year insurance companies generate over
$6 billion in premium income. Most people
are also not aware that over $1 billion in claims
are paid out every year by the industry. These
are truly staggering numbers.
To bring more clarity and insight about an
industry that is often misunderstood (and even
maligned) to the public, the University of the
West Indies (UWI) Management Department
in collaboration with the T&T Insurance Insti-
tute (TTII) and the Association of T&T Insur-
ance Companies (ATTIC) hosted a public edu-
cation seminar last week entitled, "The Critical
Role of Insurance in Everyday Living---Nothing
Moves Without Insurance."
The seminar, held at the Daaga Auditorium
of the UWI St Augustine campus, had as its
objective: "to educate the public on the critical
role of the insurance industry in various aspects
of the functioning of society."
The seminar was intended to act as a catalyst
for future outreach initiatives by the industry
to raise the image of the insurance sector across
T&T. Feature speakers at the event included:
Mariano Brown, former minister in the Ministry
of Finance; Lloyd Ince, principal at Consulting
Interface Ltd; Marlene Murray, university lec-
turer in insurance and risk management, and
Sookdeo Beepath, ATTIC director.
Insurance, savings and
In his presentation Brown spoke about the
changes that have taken place in the insurance
industry over the course of the last 50 years
and the challenges facing the industry as it
moves into the future.
"Roughly 50 years ago, while we may have
had insurance companies, very few were locally
owned and the savings that they mobilised
and allocated were, for the most part, not
invested in T&T," Browne stated.
Citing the 1966 Finance Act as a "watershed
moment" in the development of the insurance
industry, Brown said that the act fostered
greater locally-driven initiatives to build the
industry and local capital markets by extension.
He was quick to add that the growth and
evolution of the insurance industry over the
years has given the sector the benefit of being
able to make long-term investment decisions.
"The insurance sector is so important
because, in a sense, it is similar to a bank with
the difference being that we put our money
in and forget about it until 40 years later when
we come to collect our policies. This allows it
to mobilise capital for the long term with
respect to investments."
Brown, however, said the industry faces a
conundrum with respect to balancing the need
for "greenfield" investments with safety given
the regulatory environment that the insurance
industry, particularly pension funds find them-
"At the regulatory level, it was felt that the
insurance companies were overinvested in the
domestic market, so the question is: how do
you mobilise savings to develop your domestic
market but, at the same time, ensure you re
not overexposed in that market?" Browne said.
"If we are to move forward, there is need for
greater domestic investments."
The cornerstone of
Lloyd Ince, a financial industry veteran and
consultant to many companies in the insurance
industry, spoke to the value of insurance as a
means of asset protection.
"The perils we face in society can be placed
into three categories based on the assets we
generally own. There is the threat to our ability
to earn, the threat to our fixed assets and threats
to our financial assets. This is where insurance
comes in," said Ince.
Going further, he said: "We need to transfer
our risk exposure to an insurance company to
deal with the perils of life. It is the responsible
thing to do."
Using an illustration of a shipment of cars
moving from Japan to Trinidad, Ince was able
to capture the varying forms of insurance that
cover such a business transaction.
"At the manufacturer level there is workmen s
compensation, public liability and fire and extra
perils insurance. At the shipping level, there
is marine insurance. Once the cars arrive, the
importer would insure itself against fire, theft
and damaged goods. Insurance thus played a
critical role in this transaction as it protected
both the importer and the foreign supplier."
Empowering people to
In her presentation, Murray examined the
relationship between insurance companies and
policyholders with a specific focus on personal
"The insurance industry has supported us
in managing these risks by providing us with
policies that cover them in the event that
untimely situations arise. These policies really
ensure that we have the financial resources to
deal with these risks," she said.
Providing hard numbers to support the finan-
cial contribution of the industry, Murray said:
"In the year 2014 the industry paid out $1.9
billion in claims to individuals with respect to
these personal risks."
Murray was quick to point out that, at the
individual level, there are major demographic
and psychographic changes taking place in
"Collectively, we are living longer, and the
longer we live it means we have more years to
provide for ourselves after retirement. One has
to cater for this. Thirty-five years ago, receiving
a pension of $1,000 per month might have
been sufficient. Now that same $1,000 does
nothing for you. We have to take living longer
along with the inflationary impact into con-
sideration," Murray said.
She also noted that people having fewer
children, the move away from company-based
careers and constrained resources of the State
are all issues that point to the need, at an indi-
vidual level, for appropriate insurance coverage.
"Insurance can play a pivotal role in managing
these risks to our person through policies that
enable people to plan for these circumstances."
Insurance education and
careers in the industry
Sookdeo Beepath spoke about the role that
ATTIC and TTII play in serving the interests
of the insurance industry, highlighting the dif-
ferent kinds of training available to individuals
willing to build a career in the industry and
the various career paths that the industry offers.
Beepath said insurance plays an important
role in everyday living. "Insurance sustains
economic activities all around from your per-
sonal life to the conglomerate. Some of us may
have had some bad experience while dealing
with an insurance representative but the pur-
pose of insurance remains the same.
"In the case of general insurance to put you
back in the same position prior to the unfor-
tunate event and in the case of life insurance
to provide a beneficiary with financial resources
so that life goals and ambitions can be ful-
Insurance stats reveal:
over $6b in income
Premium Income (2014):
Life insurance premium income:
General insurance premium income:
Total premium income: $6.83 billion
(Registered with CBTT as at September
Life insurers: 9
General insurers: 17
Claims paid out by life insurance
companies to policyholders (2014):
Ordinary life insurance: $400 million
Annuities and other pension: $425 million
Health insurance: $500 million
Other life policies: $472
Jobs in the insurance industry:
Finance and accounting
Advertising, public relations
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