Insurance

Barbados Insurance Industry

The Barbados Insurance Industry

The story about the insurance industry in Barbados is one of success.
It revolves around the formulation of a policy aimed to localize the industry which, for the most part, was foreign-owned during the early 1970’s.

Today, both the life and general insurance segments of the industry, benefiting from an expansion in the labour force as well as home and property ownership, have placed Barbados among the leading spotlights in the insurance business.

The industry’s roots in Barbados run deep, given the historic nature of the Barbados Mutual Life Assurance Society, now known as Sagicor (meaning ‘wise judgement’) Financial Corporation.

The Mutual, as it started out, was established in the nineteenth century. The company transformed from a local single-line life insurance company to a regional financial services group, before growing into the international financial services market. Today, Sagicor has become an international player in the insurance industry, operating in 22 countries in the Caribbean, USA, UK and Latin America.

It’s no wonder that Barbados has attained such prominence in the insurance industry and market, delivering a wide range of services to customers everywhere.

How It All Began …

The early 1970’s was the starting point for the metamorphosis within the Barbadian insurance industry.

At the time, the life insurance business revolved around The Mutual (now Sagicor); Canadian companies Manufacturers Life Insurance and Confederation Life; American Life Insurance (owned in the USA); CLICO (owned in Trinidad); British American; and among others, local companies called Anchor Life and Life of Barbados Limited (LOB).

In the area of general insurance, NEMWIL, Bryden’s, Great Northern and Narsham were some of the most notable. In 1978, the Government created the Insurance Corporation of Barbados (ICBL) which was to become the leading supplier of general insurance in Barbados.

In the early 1980s, LOB acquired the Canadian company Confederation Life. By the mid 1990’s Manufacturers Life also sold its Barbados business to LOB, which had now become the lead player in the life business insurance.

This process of consolidation continued with The Mutual (now Sagicor) then acquiring LOB in a hostile takeover, beating out Guardian Holdings Limited of Trinidad and Tobago, which also indicated an interest in acquiring LOB.

The market also saw The Mutual (now Sagicor) changing its structure from a mutual company to a stock company, converting the policies of its policyholders to shares in the process.

The Barbados Credit Union Movement established a general insurance company called Cooperators General Insurance, while a new player Consumers’ Guarantee Insurance (CGI) was set up in Barbados as well, offering motor, home, contents, and commercial insurance.

The Trinidadian owned company CLICO ran into financial problems, a development that has given rise to CLICO General and CLICO Mortgage and Finance being acquired by a local businessman and a local credit union respectively.

Interestingly enough, the ICBL (which started out as a general insurance company) has been sold to Bermudan interests and shortly after ICBL expanded and added a life insurance business to its portfolio.

Completing the restructuring and consolidation process was the development of a new system for the regulation of the insurance industry, as well as the non-bank financial sector. The Financial Services Commission has been established to perform this function. For more information, see their website at

www.massyunitedinsurance.com/index.html

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Author: Brett Callaghan