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Follow on Google News | Recently released market study: Caribbean Insurance Report 2011Recently published research from Business Monitor International, "Caribbean Insurance Report 2011", is now available at Fast Market Research
Barbados-based but regionally diversified, Sagicor suffered little from the downgrading of the sovereign ratings of Barbados and Jamaica, or from the Jamaica Debt Exchange (JDX) programme, which involved a restructuring of that country's government debt. Guardian Holdings, the Trinidad-based, regionally diversified financial services group, reported steady growth in its life business in H110. The published results of other (generally much smaller) groups based in the region have indicated that premiums have held up in spite of the downturn in remittances to the Caribbean from expatriate workers in the US and elsewhere despite the softness in most countries' tourism industries. As a regional market for insurance, the Caribbean remains something of a backwater, notwithstanding that the combined population of the Dominican Republic, Jamaica and Trinidad and Tobago is about 16mn, and all countries are able to exploit their geographic proximity to the US. In many instances, nonlife and life insurance remains underdeveloped in terms of the metrics that we favour (non-life penetration and life density respectively) Perhaps for this reason, the major multinational insurance companies have little representation on the ground. Through its purchase from AIG of the global operations of ALICO, MetLife has operations in Jamaica, Trinidad and Tobago, the Netherlands Antilles and several of the microstates of the Caribbean. ALICO's local business, ALGICO, is unusual relative to other operations world-wide in that it is active in both the non-life and the life segments - and not just in life. Spain's MAPFRE, which owns substantial businesses across Latin America, is present in the Dominican Republic. However, these are the exceptions to the rule. In general, it is local institutions such as Seguros Banreservas in the Dominican Republic, Jamaica International Insurance or RoyalStar in the Bahamas, or regional groups such as Guardian Holdings and Sagicor that dominate. The competitive landscape has been complicated by the financial problems of Trinidad and Tobago-based Colonial Life Insurance Company (CLICO) and British American Insurance Company (BAICO). These were key elements of CL Financial, the country's largest conglomerate, which was essentially nationalised by the CBTT in January 2009. CL Financial had run into serious liquidity problems in the wake of the Global Financial Crisis. In October 2009, the central bank indicated that it was committed to supporting the continued operations of CLICO and BAICO, notwithstanding that the process of orderly disposal of other assets of CL Financial is taking place more slowly than expected. The central bank's long-term plan is for CLICO to be privatised by way of an IPO on the Trinidad and Tobago Stock Exchange. Prior to the crisis, CLICO and BAICO collectively had been one of the largest regional insurers. As is the case in other parts of the world, premium growth appears to have been resilient over few years. However, the insurers face several challenges. Mixed Economic Conditions During 2010, economic conditions improved marginally across much of the region. As noted above, premiums in both the non-life and the life segments of the countries profiled have been resilient. However, there is no sign of a catalyst for insurance to develop rapidly, with the result that non-life penetration and life density - the two key metrics from our point of view - rise. The underdevelopment of life insurance in Jamaica and the Dominican Republic suggests that people who are rich enough to provide for their long-term futures generally do so through other vehicles or countries. Competition From Other Countires Of the countries profiled, Jamaica and the Dominican Republic have not enjoyed the long-term political and financial stability that is necessary to develop a substantial offshore financial services sector. Trinidad and Tobago (like Curacao, which is not profiled in this report) clearly has been sufficiently stable for large indigenous institutions (such as CLICO and its parent CL Financial) to flourish. However, economic development has been driven overwhelmingly by energy and related sectors. By contrast, the Bahamas and Barbados have enjoyed significant success in developing financial services. The Bahamas is a longestablished leader in offshore trusts and private banking and a successful (if newer) player in hedge fund administration and domiciliation. Detailed estimates of the size of Barbados' offshore captive insurance community are few and far between, but indicate that annual premiums amount to about US$2bn. However, the Bahamas and Barbados face significant competition from nearby centres that are well established such as the Cayman Islands and the British Virgin Islands (in fund domiciliation and offshore banking) or Bermuda (in insurance). The premiums of Bermuda's captives, for instance, amount to US$12bn or so. In estimating the development of Barbadian captives, we have assumed that their premiums have moved in line with their Bermudian counterparts in recent years. Catastrophe Risk For more information or to purchase this report, go to: - http://www.fastmr.com/ About Business Monitor International Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at http://www.fastmr.com/ About Fast Market Research Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156. # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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