by Marlon Madden
With the COVID-19 pandemic putting increased pressure on an already underinsured market due mainly to unemployment, one industry official is putting forward the idea of a national “insurance pool” to assist those who are unable to buy property coverage on their own.
With a number of uninsured houses also going up in flames annually, Chief Executive Officer of Trident Insurance David Alleyne told Today’s BUSINESS that the time had come for measures to be taken to ensure greater insurance penetration in Barbados.
“There are too many incidences that happen in Barbados where people have lost their assets that they have worked for, for a long time, and they have not been able to recover,” said Alleyne.
“There will be a tremendous effect on our economy if there is a catastrophe and the insurance industry does not play a leading role in the recovery.
In other words, if a major proportion of the economic loss falls to government that is not a good thing especially at this time where we have a substantial job to do to rebuild our economy from the ravages of COVID.
So for people to help themselves and help government a high level of insurance penetration is necessary,” he explained.
Alleyne said Barbados already had very strong legislation governing the industry and a very robust regulator, but insisted that there were still too many people who were underinsured, or needed insurance but simply were unable to afford it.
He proposed that a mechanism be put in place to ensure that those who were unable to afford full insurance would be able to get assistance, adding that it was just an idea at this stage and would have to be fully discussed among industry leaders and Government on exactly how it would work.
“Maybe the industry could look at developing a pool for low income earners. Maybe we could start a dialogue with Government that could help provide some kind of pool for people who struggle, to ensure that those properties that are burning down all the time . . . could get the requisite insurance coverage,” explained Alleyne.
In addition to the lack of insurance concern, the COVID-19 pandemic has created a situation where individuals have become delinquent in meeting their insurance obligation due to the loss of employment.
According to a 2020 Central Bank of Barbados document titled Outlook for Barbados’ Insurance Sector in the Face of COVID-19, during the first half of the year insurers who write short-term business, some of which include health insurance, did not report any significant increase in claims.
However, the main area of concern related to underwriting profitability as premium and investment income was expected to fall, due to record high unemployment throughout the year, which industry officials said could lead to reduced premium collection.
In addition to reduced premium collection, said the document, the life insurance sector also expressed concerns about policy surrender and mortgage delinquencies.
Alleyne told Today’s BUSINESS that over the past year, Trident Insurance, which offers property, motor, travel, marine and health insurance coverage, has worked with clients to put payment plans in place.
He said: “COVID has caused an economic trauma. So our account receivables have gone up tremendously over the last year, which is evidence that people’s incomes have declined”.
“We have been working with our clients to facilitate them because we have to. But that in itself is a cost
to insurance companies.
We are holding people covered but we are not receiving money for it in a timely manner,” Alleyne explained.
“It really is a burden on insurance companies when they have to keep premiums outstanding six, seven, eight or even ten months,” he added.
The insurance industry official said he was satisfied though, that Trident Insurance has done a “good job” in facilitating its clients, adding that the company would continue to work closely with them.
marlonmadden@barbadostoday.bb
