Home' Trinidad and Tobago Guardian : October 31st 2013 Contents OCTOBER 2013 • WEEK FIVE www.guardian.co.tt BUSINESS GUARDIAN
COVER STORY | BG5
confidence is one of the greatest hazards of the insurance
industry whose business it is to stake a claim in the future.
When the future seems risky, it seems natural not for people
to choose to buy or invest," he said.
He said after 2008, this lack of confidence impacted heavily
on the industry.
"We saw this in rate of surrenders which has since stabilised.
The most recent Central Bank figures indicate that on a year-
on-year basis since December 2012, surrenders decreased by
2.3 per cent compared to an increase of 21.7 per cent in the
previous year. So the economy in 2013 is less scary after Sep-
tember 2008 when the US sub-prime crisis triggered the
global panic button," he said.
He said those in the insurance industry have all the ingredients
"You might know the market down to the last t' and you
might understand all the needs of your potential clients. But
if you enter the market and engage a client without an analysis
of yourself, you run the risk of falling victim to the one things
you took for granted. So every transaction is triangular, the
market, the client and the insurance industry personnel," he
Despite challenges in the global industry, he said there is
still economic opportunity that driven and motivated people
"At no time in history has the individual had much power
to shape his own destiny as today. The industrial revolution
is dead and gone, today in the 21st century it is knowledge
and not product is the biggest growth industry of all. In this
industry, the only real knowledge to growth and prosperity
are the limitation of the human mind," Martinez said.
Wendy Ho sing, deputy inspector of Financial Institution,
Central Bank, gave statistics to show how rapidly the insurance
industry has grown in T&T and the importance of the new
"Over the past few decades, the insurance sector developed
rapidly in T&T as well as globally. The banking and insurance
sector in 2012 held assets of $169 billion or representing close
to 110 per cent of gross domestic product (GDP). Insurance
intermediaries in T&T, like agents, salesmen, adjustors, brokers
in T&T, total 1,641 in 2004, and by 2009, that number had
increased to 3,033, which is an increase of 85 per cent over
a five-year period," she said.
She referred to Clico's collapse along with other international
"This underly the need for a robust regulatory framework
to protect the system and consumers of financial services. In
developing the bill, the Central Bank used as a guide the insur-
ance core principles by the International Association of Insurance
Supervisers and these constitute minimum standards to protect
consumers. The bill introduces best practices in areas of cor-
porate governance, risk management, consolidated supervision,
policyholder protection and, recently, antilaundering," she
Ho Sing said because of the past failures of financial insti-
tutions, regionally and internationally, consumers are now
more aware and more cautious.
"The Central Bank runs the National Literacy Programme.
The Minister of Finance also spoke about consumers being
more aware of protections the Insurance Bill has. The Association
of T&T Insurance Companies ( ATTIC) and other organisations
also run articles in the media on insurance products," she said.
Ho Sing said it is unlikely the Insurance Bill would be passed
"We can only hope and keep our fingers crossed that the
passage will occur in 2014, in my view," she said.
Ho Sing told stakeholders in the insurance industry it cannot
be "business as usual" in the insurance industry because of
the changes in the world today.
"The journey to developing solid customer relationships
relies on building strong relationships on honesty and integrity.
Be prepared to increase your knowledge and acquire new skills,"
Continued from Page 4
T&T has been trying to diversify its economy
since colonial times, but there is no more urgent
time like now for the country to diversify its
economy, its export markets and the way it does
business, said Victor Bulmer-Thomas, professor,
University of London.
"T&T is no stranger to export diversification.
Two hundred years ago, both islands were both
dependent on the export of Sugar and its related
products, molasses and rum. Tobago escaped
from its dependence on sugar and only started
to do so as the price of sugar collapsed. By the
1950s, Trinidad was firmly established as an
exporter of energy. Energy products became more
diversified, with natural gas being added to the
mix," he said.
Bulmer-Thomas is emeritus professor of eco-
nomics and also honorary professor at the Institute
of the Americas at the University of London.
He argued that a country does not even need
natural resources to develop, pointing to Asian
countries like Japan.
"T&T is fortunate to be rich in energy resources,
but this is not a necessary condition for devel-
opment. Many countries, like Japan and Singa-
pore, do not have resources. Some countries, like
Qatar, are so richly endowed with energy, they
have no incentive to diversify. This is not the
condition which T&T faces as it is not so richly
endowed that it can ignore all other options," he
Bulmer-Thomas spoke about the dangers and
"risks" T&T and other energy-reliant economies
face if they do not diversify.
"Gas prices could fall because of the shale gas
revolution in the United States, and the same
could happen to oil prices in the future because
of the experiences in the past and the re-eval-
uation of previously closed wells and investing
in new technologies, leading, potentially, to an
increased supply. There could also be the sub-
stitution of oil with other products, like renew-
ables," he said.
Bulmer-Thomas warned that many other
countries rich in resources have tried and failed.
"In recent years, some countries like Brazil,
have actually gone backward, becoming more
dependent on natural resources than they were
before the phenomenal growth of China," he
Bulmer-Thomas spoke on Tuesday at the
opening day of the ExporTT Export Development
Forum 2013 at the Hyatt Regency Trinidad hotel,
On Monday, the World Bank released its Ease
of Doing Business Report where T&T moved up
to position 66 up from position 69.
This was a movement of seven places as four
countries were added this year.
The report analyses regulations that apply to
an economy's businesses during their life cycle,
including start-up and operations, trading across
borders, paying taxes, and resolving insolvency.
The aggregate ease of doing business rankings
are based on ten indicators and cover 189
Bulmer-Thomas referred briefly to the report
in his presentation and gave the view that T&T's
upward movement is still not good enough and
the country should aim to be in the top 50
countries if it is serious about development.
The report was released on Monday after
Bulmer-Thomas had prepared his presentation
for the ExporTT conference.
"In 2012, T&T was at position 69, and I am
hoping that you could forgive me as I could not
rewrite my speech after hearing last night's
results. The results may not seem so bad,
although it is hardly outstanding if the country
wishes to reach First World status," he said.
He said if the sub-indicators are analysed,
those other than the main indicators, then T&T
continues to perform badly.
"The index is a weighted average of other
indicators. In 2012, the country was 71st position
in starting a business, 76th in trading across
borders and 103rd in getting electricity. These
are supposedly based on survey in the business
community, so there is some truth in that. It
is still far from the top 50 countries which T&T
should aspire," he said.
He said T&T needs the Government and private
sector to work together to find new markets and
"Export promotion will not flourish when
there is a lack of trust and co-operation between
the private and public sector. It is obvious that
the Government of T&T needs the private sector
to promote non energy exports as these are not
expected to come from the public sector," Bul-
He said the private sector needs the Govern-
ment and vice versa.
"It may not be so obvious that the private
sector needs the public sector if its exports are
going to succeed. It is the Government, and not
the private sector, that negotiate preferential trade
agreements. It is also the Government that has
influence over the price that affect firms."
He urged the Government to use incentives
to motivate and encourage the private sector to
engage new markets.
"Human beings are motivated in all sorts of
ways, like the greenest company or best employer
or the most innovative firm. This is an important
part of export promotion. Entrepreneurship needs
careful nurturing," he said.
Bulmer-Thomas said tourism is an important
way of diversifying the economy, but never was
"homogenous" and will be less so in the future.
He said there are different types of tourists
for different markets.
"The tourist who comes to stay in an all-
inclusive five-star hotel has little in common
with a music lover who comes for a music festival
and stays at a small hotel. The eco-tourist who
moves from one jungle to another has nothing
in common with a cruise ship visitor who may
not even know what country he or she is in.
There are many types of tourism that need the
support of ExporTT. Health tourism is an example
as medical bills sore in developed countries this
can be an opportunity to attract visitors."
He said there are export opportunities for T&T
in countries this country has signed partial scope
and other trade agreements with in Latin America,
like Guatemala, Panama, the Dominican Republic
and El Salvador.
He also referred to Venezuela, Colombia and
Canada with which Caricom is negotiating a free
trade agreement to which T&T can export.
"There are many opportunities outside non-
traditional markets, like Caricom, that T&T firms
should be able to get into," Bulmer-Thomas said.
Trade and Investment Minister Vasant Bharath, left, and Victor Bulmer-Thomas, professor,
University of London. PHOTO: SHIRLEY BAHADUR
Insurance intermediaries grew by 85% in five years
London University professor:
T&T at 66 spot in World Bank
business report 'not good enough'
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