A senior insurance industry executive is concerned that Barbadians, including some home owners, are still not adequately covering their assets and in a number of instances more people have no insurance coverage at all.
Paul Inniss, executive vice-president and general manager of Sagicor Life Inc., used the example of people who, once they pay off their mortgages, stopped insuring their houses.
He believes it is critical for the insurance industry and country generally to find ways to “help our people” help themselves, especially at a time when the economy was growing.
“I read about the reduction in insurance penetration, but you have a growing economy, and you would think that insurance penetration would increase. So the question is, what is happening? There must be an insurance gap,” Inniss said during a roundtable discussion to launch the 2024 Financial Stability Report.
“Are there alternatives to traditional insurance in terms of how you manage risk and transfer risk through the risk transfer mechanism. Maybe. I think in some cases, if you hear that NPLs (non-performing loans) are reducing, it could mean that as NPLs reduce on property related insurance and also the need for life insurance, that the market might think that there is no further need for insurance.”
He added: “We are seeing some of that where some people would rather protect the interest of the bank than the interest of the family, and we try to actually caution our markets around how they plan financially for their family.
“So that then ties into financial literacy and our responsibility in helping our various markets and segments within the markets understand the importance of protection at various levels, just ensure that there is also legacy in terms of the ability to look after the household over a period of time or the business.
“Because you will find that some people take risks that they think they can manage, and they really don’t have the capacity to manage.”
On the issue of people taking unnecessary risks, Inniss, a former banker, said that he has learned that one of the first things people do after their mortgage has been paid off is to stop insuring the property.
“And I always ask, why? protect the interests of the not protecting your family? thinking is in the opposite where I think financial planning people understand the need he said.
“I don’t think in a lot of really understand insurance. insurance is forced on you institution or by some other to just making a decision risk, because, similar to a businesses, your families on risk.
“You are exposed, and you out, how are you going to risk and then you look for solutions to help with that.”
property. why? Why would you the bank but you are family? Somehow the opposite direction, that is planning or helping need for protection,” of cases our people insurance. It is like you by a financial other party, as opposed based on the a bank, similar to actually take you have to figure manage that for the appropriate that.” (SC)
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