GIAB: Insurance prices not the fuel to uninsured vehicle surge

The General Insurance Association of Barbados (GIAB) has rejected suggestions that unaffordable premiums and weaknesses in the insurance market are driving the rise in uninsured vehicles, instead pointing to changes to the vehicle registration system and calling for direct talks with the Financial Services Commission (FSC).

In a statement issued on Thursday, the association responded to FSC Chief Executive Officer Warrick Ward who in a Barbados TODAY exclusive linked the problem of uninsured vehicles to broader affordability pressures, low insurance penetration and structural issues such as reinsurance costs.

“It is most unfortunate that the head of the regulatory body for the industry can make a vague statement of this nature, having never spoken to the members of the industry to discuss or look to address this purported ‘weakness’,” the GIAB said.

The association maintained that the insurance market remains financially sound, noting that several member companies are AM Best-rated — the largest credit rating agency in the world specialising in the insurance industry — with their financial strength and claims-paying ability regularly assessed by the international ratings agency.

The industry body further challenged the framing that affordability is the central issue, arguing that recent reforms to the road tax and registration process altered how insurance compliance is verified.

“We note that there is no reference in the article to the fact that the change in the road tax and registration process removed the requirement to show proof of insurance prior to paying the road tax,” the GIAB said. “Neither did it refer to the accountability of the vehicle owner to simply follow the law.”

In March 2025, the Barbados Revenue Authority (BRA), in collaboration with the Licensing Authority, general insurers and The Barbados Police Service, introduced a digital system allowing private vehicle owners to complete registration renewals online. Under the new system, insurance policy details are uploaded electronically by insurers to update vehicle records, and motorists can download a digital registration card once the system verifies compliance.

At the time, the government described the initiative as a modernisation effort intended to improve convenience, strengthen system integrity and allow police to digitally verify registration status.

Police data indicate that of roughly 180 000 vehicles on the island, about 50 000 are uninsured or untaxed. Senior industry executives estimate that three in every ten accidents involve either uninsured vehicles or unlicensed drivers.

Ward, in his interview, acknowledged the scale of the problem but framed it partly through the lens of affordability and financial inclusion.

“One of the key things … we would need to consider is whether or not the price or the premiums that are charged has taken it out of the reach of ordinary people,” he said, adding that reinsurance costs and low penetration rates also form part of the broader challenge.

The FSC chief also made clear that enforcement of uninsured vehicles falls outside the commission’s core mandate, describing it as primarily a police matter and reiterating that the regulator focuses on the macro-regulation of the insurance sector.

In response, the GIAB said premiums are risk-based, reflecting driver profiles, vehicle types and claims experience. It further noted that reinsurance — which must be sourced externally — carries high costs and pointed out that motor insurance premiums have not increased in line with inflation over the past 15 years.

“The members of the General Insurance Association of Barbados do not increase premiums without due diligence and reason,” the body said.

The association indicated that it is seeking engagement with the regulator on the matter, noting: “The GIAB looks forward to meeting with the FSC CEO to discuss any concerns he may have about the industry.”