B’dos still attractive to international firms

By Marlon Madden

Newly-appointed Chief Executive Officer of the Financial Services Commission (FSC) Warrick Ward is reporting continued interest in Barbados as a domicile for international business firms.

He gave the report on Thursday, while pointing to the continued growth in captive insurance companies choosing Barbados as their headquarters.

“The bulk of the captive insurance business continues to originate from Canada, which accounts for 51 per cent of the registrants, followed by the US, which accounts for about 25 per cent,” said Ward.

He disclosed that the FSC, a non-bank financial institution supervisor, currently regulates close to 1,500 licensees – 986 insurance companies and intermediaries, 29 credit unions, 247 occupational pension schemes, 27 mutual funds, 19 securities companies and more than 100 brokers, traders, investment advisors and other market participants.

Ward said “With regards to the insurance sector, it continues to grow, but in 2022 there was some indication that there was sort of a softening in the market cycle largely driven by a range of exogenous factors such as climate risks, inflation and notable increases in reinsurance costs.

“Nonetheless, in 2022 there were 10 new captive formations compared to 34 in 2021. I am sure for 2023 we should see some improvement in that. A lot of the management companies are assuring me that they are working hard [in that regard],” reported Ward.

“As at December 2022, the FSC had on record 187 class-one companies with an estimated asset value of $54.1 billion. A class-one licensee is an insurance company that underwrites related foreign business. Class two refers to an entity that underwrites third-party risk, and class three are insurance intermediaries and insurance management or insurance holding company,” he said.

““Likewise, as of December [last year], there were 98 class-two licensees on our books with an estimated asset value of $208.3 billion. Quite a significant sum. The sector is one that employs a lot of our highly-skilled members of the public and so we want to make sure this sort of trend continues where we are able to further develop the market,” he said.

Ward gave the update on Thursday at the FSC’s corporate office in Bay Street during a launching ceremony for the third annual Barbados Risk and Insurance Management (BRIM) conference, which is scheduled to take place on March 23 and 24 at the Hilton Barbados Resort.

The two-day event is expected to attract a range of local, regional and international thought leaders on insurance, reinsurance, risk, banking and accounting from around the world, and will engage participants on a range of related topics.

In addition to insurance, the FSC is responsible for regulating and supervising the island’s credit unions, securities and occupational pension sectors.

“With respect to those entities with direct exposure to Barbados, there are 20 major players, comprising 14 non-life companies and six life companies, with asset values of $1 billion and $2.7 billion, respectively.

“There have been varying degrees of activity in this sector, but over the past five years, we have witnessed two new formations and three company mergers. This, especially the merger activity, could be a signal that there is a greater emphasis being placed on deriving efficiencies among the market participants,” said Ward.

Chairman of the BIBA Insurance Committee Ricardo Knight said the intention of the upcoming conference was to bring insight “to the many areas of risk management that impact businesses locally and globally”, while reiterating why Barbados was the ideal jurisdiction for international firms.

“We are highly-ranked as an international insurance centre. I think it is something that Barbados is proven to do well. We have been doing it for almost 40 years . . . We would really like to have these opportunities that highlight to Barbadians that we are world-class,” said Knight. 

marlonmadden@barbadostoday.bb