The Association of TT Insurance Companies (ATTIC) is seeking a higher priority level for the provision of insurance services to be recognised as trade for the purpose of foreign-exchange allocations.
During ATTIC’s year-in-review event on December 5, president Dean Romany outlined the reasons for this request that the association brought forward in a meeting with the Central Bank.
"Insurers must have reinsurance cover as the capital base of all local insurers is too small to withstand a significant loss in TT. Local insurers use the support of multinational reinsurers in the UK, Germany, Switzerland, Canada, the USA etc.
"We use these companies' capital for significant losses reducing the burden on the state when claims have to be paid, and to ensure that insurance companies are able to sell their insurance products to cover the ever-increasing demands and the increasing insurance values of commercial insurance consumers."
He said a higher property level would ensure the insurance protection gap – the difference between economic losses from disasters (natural or otherwise) and the portion of those losses covered by insurance – is not widened.
"This includes those that do not have insurance, those that are inadequately insured and also insurance companies that are unable to recover from their reinsurance contracts. That also widens the gap.
"The International Monetary Fund (IMF) highlights that disaster recovery is often delayed due to insufficient insurance, impacting long-term economic stability.
"After a catastrophic event there will be a huge inflow of foreign exchange to the economy. And with proper reinsurance in place and reinsurance premiums paid, the inflow of this significant foreign exchange will help with the stability of the economy."
He said some of the key issues affecting the industry include challenges in talent acquisition and retention, supply of reinsurance and regulatory barriers.
"Skilled accountants, actuaries and data experts who can effectively navigate IFRS 17 are in short supply and expensive. Therefore, reliance is being placed more and more on foreign consultants, which has a negative impact on the growth of local resources."
He said locally, premium rates had been affected over the past few years by issues the industry had faced such as hardening of renewal terms, including reduced commissions, increased cost and decreasing capacity and catastrophe cover.
He warned, "Reinsurers have signalled that this trend may continue in the foreseeable future."
In addition, he said, "As the regulatory environment becomes more complex, the need to invest in compliance tools and expertise to manage regulatory risks effectively becomes more critical. Member companies have allocated the necessary financial resources to be equipped to face these new requirements and rules."
He also cited cyber security threats and climate change as key industry challenges.
"We must be ever wary of the increase in cyber crimes, which has become endemic worldwide. The Central Bank recently rep
