Governance, Risk, and Compliance in the Trinidad and Tobagonian Insurance Industry: Ken Research

Trinidad and Tobago Insurance Market: Ken Research’s Governance, Risk And Compliance-The Trinidad And Tobagonian Insurance Industry provide an overview of the insurance regulatory framework in Trinidad and Tobago. It gives the latest key changes and changes expected in the country’s insurance regulatory framework. The report provides key regulations and market practices related to different types of the insurance product in the country and rules and regulations pertaining to key classes of compulsory insurance, and the scope of non-admitted insurance in Trinidad and Tobago. The key parameters including licensing requirements, permitted foreign direct investment, minimum capital requirements, solvency and reserve requirements, and investment regulations and details of the tax and legal systems in the country are detailed in the report.

In Trinidad and Tobago, all the insurance companies can be categorized into three broad categories- life insurance, general insurance and a few companies writing both life insurances and P&C policies. The insurance market is regulated by the Central Bank of Trinidad and Tobago (CBTT) under the rules of the National Insurance (Amendment) Act of 2004. Around 2007, the CBTT, the Association of Trinidad and Tobago Insurance Companies and other stakeholders have made amendments to the Act that resulted in significant changes in risk-based capital reserves framework, reporting protocols and deriving a common actuarial valuation methodology.

The year 2016 was challenging for the country since it was facing a declining economy with rates under sustained pressure and restrained premium income growth. The lack of sufficient foreign exchange also caused problems with payment of reinsurers. In both life and non – life segments, the overall margins began to fall due to three reasons- increase in operating expenses, lower underwriting profit and declining investment yield. However, the insurance sector shows resilience. Many companies responded to the existing crisis of a limited market by reaching out and capturing the uninsured and underinsured customers. Many companies dealt with it through investment income to offset the squeeze on margins. As technology is catching up on the whole world, so is it in Trinidad and Tobago to improve their sales and control costs. All of these show profitability in the sector.

Since 2016, there have not been any major or important mergers and acquisitions. The latest merger was when National Commercial Bank Jamaica entered into an agreement to buy some stake in Guardian Holdings, the parent company of Guardian Group. A cause of concern in the industry is the scarcity of foreign reserves. For insurance brokers who offer insurances in the field of marine cargo, personal property and accidents, they lack enough foreign currency to remit necessary premium payments. This has also affected remittances for international reinsurance cover.

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Ankur Gupta, Head Marketing & Communications



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