Home' Trinidad and Tobago Guardian : November 3rd 2016 Contents NOVEMBER 3 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
PHILIPSBURG, St Maarten---In the
Caribbean, change is in the air. In fact, it
is in the cloud.
There is a new conversation among the
community of technology experts who spear-
head Caribbean Internet development, and
the buzz is no longer just about physical
infrastructure. The architects of the region s
digital future are actively taking steps to
strengthen the region s economy by devel-
oping the Caribbean cloud.
"We have to look beyond basic infrastruc-
ture deployment to developing the local con-
tent, services and business models that can
truly benefit the region," said Bevil Wooding,
internet strategist with US-based, non-profit
Packet Clearing House (PCH).
"Twelve Internet exchange points are
already established in the Caribbean, and
several others are being considered. While
we continue to push for strengthening of
critical Internet infrastructure in the region,
our focus must also expand to development
of the Caribbean Internet-based economy.
We need to build out the Caribbean cloud,"
Internet exchange points, or IXPs, are
pieces of critical infrastructure that provide
points of physical interconnection between
the networks that make up the global Inter-
net. PCH has played an active role in setting
up more than two-thirds of the world s IXPs
and almost all of the exchange points in the
Caribbean. The non-profit firm has worked
closely with the Caribbean Telecommuni-
cations Union, an inter-governmental Cari-
com organisation that focuses on regional
Together, they have actively supported
the proliferation of Internet exchanges in
While establishing physical exchange
points is necessary, it is not sufficient to
advance the regional Internet economy,
Wooding said. Another crucial step is need-
"Getting the exchange points up and run-
ning is a start. But there has to be a shift
in the conversation, from local traffic
exchange to local content production, local
application development and local innova-
tion. What we want to see is not just more
people on the Internet but more people actu-
ally taking advantage of the social and eco-
nomic opportunities the Internet offers,"
"The private sector, academia and gov-
ernments all have to work in sync to create
opportunities for digital innovators and
entrepreneurs to take advantage of the Inter-
net and build on the local IXPs that now
exist. We have to actively build the Caribbean
Wooding was speaking as part of a panel
discussion on developing the Caribbean
Internet economy, held on the first day of
Sint Maarten on the Move, a regional tech-
nology development conference jointly host-
ed by the Latin America and Caribbean
Internet Addresses Registry and the Internet
Society (ISOC) in Philipsburg, Sint Maarten
from October 27 to 28.
He co-presented with Eldert Louisa,
chairman of the Open Caribbean Internet
Exchange and chief technical officer of Sint
Maarten telecom operator TelEm Group.
Karen Rose, senior director of strategy and
analysis at ISOC, moderated the panel.
Sint Maarten on the Move was part of
Internet Week Sint Maarten, a five-day con-
ference coordinated by the St Maarten
telecommunications regulator, BTP, and
focused on developing the Caribbean Inter-
The week started with the 12th regional
meeting of the Caribbean Network Operators
Group, which was jointly held with the
LAC-I-Roadshow of the Internet Corpora-
tion for Assigned Names and Numbers,
from October 24 to 26.
A broad range of technical, social and
policy issues related to Caribbean technology
development were covered in the three-day
event, held with the support of the CTU,
the American Registry of Internet Numbers
No cloud, no rain
Cloud computing critical to region's digital economy
Bevil Wooding, internet strategist, Packet
Clearing House, delivers a presentation on
developing the Caribbean Internet economy
at Internet Week Sint Maarten, held at
Sonesta Great Bay Resort, Philipsburg, Sint
Maarten on October 27, 2016. PHOTO: LACNIC
Insurance is, and has always been, the
spreading of risks across borders and
this will continue well into the future.
No country---regardless of its size and
level of economic development---
retains all its risks and prudently
manages its exposure and hence must resort
to reinsurance markets in order to offload
what it cannot keep.
T&T is no different. The insurance regulator
(in our case the Central Bank) requires insur-
ance companies to underwrite risks within
its risk-taking capability which is largely
determined by the level of their capital and
Insurance companies must carry out due
diligence tests on their reinsurers, which must
be rated by the internationally recognised
financial rating agencies.
The regulator, if unhappy with the financial
rating of a reinsurer, can register an objection
and direct that the reinsurer be replaced or
alternatively the insurance company s financial
condition can be re-assessed leading to a
charge on its capital thus reducing the insurer s
ability to underwrite risks.
All these tools will be available to the insur-
ance regulator under the new Insurance Bill
which is now before Parliament. Having high
quality reinsurers and proper reinsurance
arrangements are only so good provided the
insurer fulfills his obligations and remit funds
on time and in accordance with contractual
terms and conditions.
Part of the oversight provision imposed by
the Central Bank requires confirmation that
all reinsurance premiums are settled and that
there are no unpaid balances. There is good
reason for that.
The regulator is fully aware that failure to
meet the settlement provision, in accordance
with the terms of the contract, could lead
the international reinsurance market to deny
claims and so it would be left to the local
insurance company to meet the claims out
of its own resources which it may not be in
a position to do. Any such action could have
dire consequences and result in the collapse
of an insurer.
In recent times, a number of local insurers
have reported that they are experiencing dif-
ficulty in obtaining the much needed foreign
exchange to settle reinsurance balances, leav-
ing them vulnerable should losses occur when
payment has not yet been effected.
In the 2015 Financial Stability Report issued
by the Central Bank, it was noted that the
general insurance companies retain 43 per
cent of all gross premiums written estimated
at $3.6 billion.
However, the greatest foreign exchange
demand would relate to property risks where
the retention is only in the region of 10 per
cent of gross premiums. This is so because
of the accumulated exposure to catastrophe
risks of earthquakes and hurricanes and the
requirement by the regulator and international
rating agencies that insurers must have in
place catastrophe protection for 1-in-250
Insurance companies can handle single
attritional claims but it is the catastrophic
event which can wipe out a high of 15 per
cent of total insured values that pose a chal-
lenge and therefore this coverage must be
bought in the international market.
While clearly insurance and reinsurance
premiums fall within services and, therefore,
are not deemed as a priority in the country s
foreign exchange management when com-
pared with the settlement of essential goods
eg medicine, there are unintended conse-
quences when insurance companies are unable
to meet their obligations in a timely manner
that can jeopardise their very existence.
The international reinsurance markets
accept risks and expect to be paid on time
and are not generally minded to listen to the
plight of insurers on the basis that they can
not settle as there is a shortage of foreign
exchange in the country.
T&T has been very lucky as it has been
spared of natural disasters but the country
lies in an active earthquake zone and we do
not know the "time nor the hour" when such
an event can strike.
It would truly be a catastrophe and the
insurance industry would then have to rely
on the international reinsurance markets to
provide funding so that claims can be met.
It is therefore imperative that the authorities
are alerted to this situation so that reinsurance
premiums can be deemed a priority.
The discussion has been confined to the
settlement of re-insurance premiums. How-
ever, insurance brokers have also been queuing
up for foreign exchange to settle insurance
premiums and they should be at the back of
There are foreign insurance companies that
are not registered to carry on insurance busi-
ness in this country but are competing with
local insurers and these foreign insurers pro-
vide "binding authorities" via certain insur-
ance brokers. The regulator should clamp
down on such practices as the only foreign
entity that can operate in this market is Lloyd s
underwriters- not the foreign insurers that
appear on the binders.
In recent statements attributed to the chair-
man of the Economic Development Advisory
Board, diversification should be broadly
defined as activities that earn or save foreign
exchange. While on the face of it, the insur-
ance industry is a net user of foreign exchange,
it can be argued that, but for the localisation
of the insurance business, there would have
been no development and the country would
be placing all its risks abroad and the only
players would be commission agents.
In its stead there is now a fully developed
and mature insurance industry.
Bernard K Aquing
Insurance consultant and chartered insurer
Forex shortage affecting insurance too
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