In­ter­na­tion­al rein­sur­ers are threat­en­ing to ful­ly with­draw from the T&T in­sur­ance mar­ket, the As­so­ci­a­tion of Trinidad and To­ba­go In­sur­ance Com­pa­nies (AT­TIC) has warned.

AT­TIC said some in­ter­na­tion­al rein­sur­ers have al­ready start­ed re­duc­ing their sup­port here.

The com­ments were made in a news­pa­per ad­ver­tise­ment pub­lished yes­ter­day.

In the ad­ver­tise­ment AT­TIC said the gen­er­al in­sur­ance in­dus­try in T&T, and the Caribbean re­gion, con­tin­ues to be ad­verse­ly af­fect­ed by events in the in­ter­na­tion­al in­sur­ance and rein­sur­ance mar­kets.

“Rein­sur­ance rates over the last few years have been in­creas­ing. Ac­cord­ing to a re­port by well-known rat­ing agency Moody’s In­vestor Ser­vices Inc, rein­sur­ers have faced ‘a con­flu­ence of im­pacts’ on their busi­ness,” AT­TIC stat­ed.

“This in­cludes low in­ter­est rates, more than three years of glob­al cat­a­stro­phe loss­es and high li­a­bil­i­ty loss­es due to ‘so­cial in­fla­tion’ or in­creased court judge­ments and set­tle­ments,” it stat­ed.

AT­TIC said fur­ther com­pound­ing the sit­u­a­tion is the “on­go­ing un­cer­tain­ty sur­round­ing li­a­bil­i­ty for in­fec­tious dis­eases” such as COVID-19.

“Con­trary to these in­ter­na­tion­al trends, av­er­age prop­er­ty in­sur­ance pre­mi­ums in Trinidad and To­ba­go have de­clined and are sig­nif­i­cant­ly low­er than oth­er Caribbean ter­ri­to­ries. This trend is no longer ac­cept­able for well-known rein­sur­ance sup­port­ers of our mar­ket,” AT­TIC stat­ed.

‘Ex­ac­er­bat­ing this sit­u­a­tion is the long de­lays in rein­sur­ers be­ing paid be­cause of the con­stant chal­lenges faced by lo­cal in­sur­ers in ac­cess­ing for­eign ex­change to make rein­sur­ance pay­ments. The com­bined ef­fect has been the re­duc­tion of sup­port by some rein­sur­ers and the on­go­ing threat by oth­ers to ful­ly with­draw from the mar­ket,” it stat­ed.

AT­TIC said that lo­cal in­sur­ers are de­pen­dent on in­ter­na­tion­al rein­sur­ance for sup­port in the event of a cat­a­stroph­ic event.

Rein­sur­ance is al­so a manda­to­ry reg­u­la­to­ry re­quire­ment, AT­TIC stat­ed.

“In recog­ni­tion of their unique na­tion­al role in pro­vid­ing pol­i­cy­hold­er pro­tec­tion, lo­cal in­sur­ers must en­sure that their op­er­a­tions can meet their claim oblig­a­tions and re­main vi­able,” AT­TIC stat­ed.

AT­TIC said this is fur­ther re­in­forced by the re­cent procla­ma­tion of the In­sur­ance Act 2018 ef­fec­tive Jan­u­ary 1, 2021.

“The wel­come new act, whilst strength­en­ing pol­i­cy­hold­ers’ pro­tec­tion, fur­ther in­crease lo­cal in­sur­ance cap­i­tal re­quire­ments and op­er­at­ing costs. Lo­cal in­sur­ers will nev­er­the­less con­tin­ue to act in amend­ing lo­cal rates, in a rea­son­able and re­spon­si­ble man­ner, to en­sure that the in­dus­try con­tin­ues to be in a po­si­tion to sat­is­fy its pol­i­cy­hold­ers’ oblig­a­tions,” it stat­ed.