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 & Tobago is in the vicinity of 16mn, and all countries are able to exploit their geographic proximity to the US. In many instances, non-life and life insurance remains underdeveloped in terms of the metrics that we favour (nonlife penetration and life density respectively). The exceptions (eg non-life segment of Jamaica and the life segment of Trinidad & Tobago) are few. Perhaps for this reason, the major multinational insurance companies have little representation on the ground. AIG has small operations in Jamaica and Trinidad & Tobago. Spain's MAPFRE, which owns substantial businesses across Latin America, is present in the Dominican Republic. However, these are the exceptions that make the rule. In general, it is local institutions ' like Seguros Banreservas in the Dominican Republic, Jamaica International Insurance in Jamaica or RoyalStar in the Bahamas ' or regional groups ' such as the Trinidad & Tobago-based Guardian Holdings or the Barbados-based Sagicor Financial that dominate. The competitive landscape has been complicated by the financial problems of Trinidad & 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 Central Bank of Trinidad & Tobago in January 2009. CL Financial had run into serious liquidity problems in the wake of the Global Financial Crisis. At 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 Initial Public Offering (IPO) on the Trinidad & 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 the last year or so, as is indicated by the following table. However, the insurers face several challenges. A Deteriorating Economic Outlook Mid-2009 reports from Sagicor Financial and Guardian Holdings indicate that the managements are concerned about the prospects for economic growth in Jamaica, Trinidad & Tobago and elsewhere in the region. This is likely to have an impact on non-life premiums, especially in non-motor related lines. The slippage in the Jamaican dollar is the main reason for the weakness in projected premiums in Jamaica. Downgrading Of Sovereign Risk By Major Ratings Agencies The insurance companies are non-voluntary owners of bonds issued by the governments of their home countries. As the major agencies have downgraded the ratings (or outlooks) of regional countries, the values of the insurance companies' bond portfolios have suffered. Sagicor Financial, for example, has itself been downgraded because of the cutting in Barbados' sovereign risk rating. Competition From Other Centres Of the five 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 & Tobago (like Cura

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Caribbean Insurance Report 2010
Published on December 2009
Report Summary
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 & Tobago is in the vicinity of 16mn, and all countries are able to exploit their
geographic proximity to the US. In many instances, non-life and life insurance remains underdeveloped in terms of the metrics that we
favour (nonlife penetration and life density respectively). The exceptions (eg non-life segment of Jamaica and the life segment of
Trinidad & Tobago) are few.
Perhaps for this reason, the major multinational insurance companies have little representation on the ground. AIG has small
operations in Jamaica and Trinidad & Tobago. Spain's MAPFRE, which owns substantial businesses across Latin America, is present
in the Dominican Republic. However, these are the exceptions that make the rule. In general, it is local institutions ' like Seguros
Banreservas in the Dominican Republic, Jamaica International Insurance in Jamaica or RoyalStar in the Bahamas ' or regional groups
' such as the Trinidad & Tobago-based Guardian Holdings or the Barbados-based Sagicor Financial that dominate.
The competitive landscape has been complicated by the financial problems of Trinidad & 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 Central Bank of Trinidad & Tobago in January 2009. CL Financial had
run into serious liquidity problems in the wake of the Global Financial Crisis. At 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 Initial Public Offering (IPO) on the Trinidad & 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 the last year or so, as is indicated by
the following table. However, the insurers face several challenges. A Deteriorating Economic Outlook
Mid-2009 reports from Sagicor Financial and Guardian Holdings indicate that the managements are concerned about the prospects
for economic growth in Jamaica, Trinidad & Tobago and elsewhere in the region. This is likely to have an impact on non-life
premiums, especially in non-motor related lines. The slippage in the Jamaican dollar is the main reason for the weakness in projected
premiums in Jamaica. Downgrading Of Sovereign Risk By Major Ratings Agencies
The insurance companies are non-voluntary owners of bonds issued by the governments of their home countries. As the major
agencies have downgraded the ratings (or outlooks) of regional countries, the values of the insurance companies' bond portfolios
have suffered. Sagicor Financial, for example, has itself been downgraded because of the cutting in Barbados' sovereign risk rating.
Competition From Other Centres
Of the five 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 & Tobago (like Curaçao, 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 the energy (and related) sectors. By contrast, the Bahamas and
Barbados have enjoyed significant success in developing financial services. The Bahamas is a long-established 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) Bermuda (in insurance). The premiums of
Bermuda's captives, for instance, amount to US$12bn or so. In estimating the development of the Barbados captives, we have
assumed that their premiums have over recent years moved in line with their Bermuda counterparts.
Catastrophe Risk All five countries profiled in this report are prone to hurricanes, notwithstanding that non-life insurers can and do
Caribbean Insurance Report 2010 Page 1/5

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lay-off risk with reinsurers.
Lack Of Impetus For Growth Of Life Insurance As we noted in 2008, there does not seem to be a clear reason why life insurance
should develop as a major channel for organised savings in the region.
Table of Content
The Sector At A Glance ..........5
Table: The Bahamas' Insurance Sector At A Glance 5
Table: Barbados' Insurance Sector At A Glance ...... 5
Table: The Dominican Republic's Insurance Sector At A Glance .6
Table: The Jamaican Insurance Sector At A Glance .7
Table: Trinidad And Tobago's Insurance Sector At A Glance ...... 7
Table: Insurance Premiums At A Glance, 2008 And 2009 (US$mn) ..... 10
Key Features Of This Report ... 10
SWOT Analysis ..11
Caribbean Insurance SWOT .... 11
Global Outlook ...12
Latest News .......14
Projections And Forecasts ...16
Table: Bahamas ' Premiums, 2005-2014 .... 16
Table: Barbados ' Premiums. 2005-2014 .... 16
Table: Dominican Republic ' Premiums, 2005-2014 17
Table: Jamaica ' Premiums, 2005-2014 ..... 18
Table: Trinidad & Tobago ' Premiums, 2005-2014 .. 19
Projections And Drivers Of Growth .... 19
Table: Bahamas ' Growth Drivers, 2005-2014 ...... 20
Table: Barbados ' Growth Drivers, 2005-2014 ..... 21
Table: Dominican Republic Growth Drivers, 2005-2014 22
Table: Jamaica ' Growth Drivers, 2005-2014 ....... 22
Table: Trinidad & Tobago ' Growth Drivers, 2005-2014 .......... 23
Macroeconomic Outlooks .....24
Barbados ..... 24
Table: Barbados ' Economic Activity, 2005-2014 .. 25
Dominican Republic ....... 25
Table: Dominican Republic ' Economic Activity, 2005-2014 ..... 27
Jamaica ...... 27
Trinidad & Tobago ......... 28
Table: Trinidad & Tobago ' Economic Activity, 2006-2014 ....... 30
Insurance Business Environment Ratings .31
Table: The Bahamas's Insurance Business Environment Ratings 31
Table: Barbados' Insurance Business Environment Ratings ....... 32
Table: The Dominican Republic's Insurance Business Environment Ratings .. 33
Table: Jamaica's Insurance Business Environment Ratings ....... 34
Table: Trinidad & Tobago's Insurance Business Environment Ratings .......... 35
Table: Latin America And Caribbean Insurance Business Environment Ratings ..... 36
Regional Context ..37
Table: Non-Life Premiums In A Regional Context, 2008 . 37
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Table: Life Premiums In A Regional Context, 2008 38
Analysis of Competitive Conditions .........39
Company Profiles .42
Sagicor Financial Corporation 42
Guardian Holdings ......... 44
Regional Company Profiles ..46
Grupo Gloria . 46
AIG .. 47
Country Snapshots: Demographic Data ..49
Dominican Republic . 49
Section 1: Population ...... 49
Table: Demographic Indicators, 2005-2030 49
Table: Rural/Urban Breakdown, 2005-2030 .......... 50
Section 2: Education And Healthcare . 50
Table: Education, 2002-2005 .. 50
Table: Vital Statistics, 2005-2030 ....... 50
Section 3: Labour Market And Spending Power ..... 51
Table: Employment Indicators, 2000-2005 .. 51
Table: Consumer Expenditure, 2000-2012 (US$) ... 51
Table: Average Annual Manufacturing Wages, 2000-2012 ........ 52
Trinidad & Tobago Demographic Data ... 52
Section 1: Population ...... 52
Table: Demographic Indicators, 2005-2030 53
Table: Rural/Urban Breakdown, 2005-2030 .......... 53
Section 2: Education And Healthcare . 53
Table: Education, 2002-2005 .. 53
Table: Vital Statistics, 2005-2030 ....... 54
Section 3: Labour Market And Spending Power ..... 54
Table: Employment Indicators, 2000-2005 .. 54
Table: Consumer Expenditure, 2000-2012 (US$) ... 55
Table: Average Annual Manufacturing Wages, 2000-2012 ........ 55
Methodology ......56
Insurance Business Environment Ratings .... 57
Table: Insurance Business Environment Indicators And Rationale 57
Table: Weighting Of Indicators .......... 58
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