Senior vice-president of the Insurance Association of Jamaica (IAJ) and head of insurance and wealth management at Scotia Group Jamaica Dr Adrian Stokes is hoping the Government will hasten the passage of investment and pension regulations that affect the insurance sector.
Speaking at a hybrid press briefing held by the IAJ at the Jamaica Pegasus hotel on June 2, 2021, Stokes said, “We would like the minister of finance to hasten his steps to revise the investment guidelines so the industry can play a greater role in terms of providing funding for both the private sector as well as government through public-private partnerships as we seek to rebuild our COVID-damaged economy.
“We also use the opportunity to ask him (minister of finance) to advance the Pension Reform Agenda to provide more robust pension arrangements, such as vesting, portability and participation in multiple pension schemes.”
He stated that with only about 10 per cent of the island’s workforce contributing to a registered pension scheme, completion of the pension reforms now underway would be beneficial for all.
Dr Stokes explained that life insurance in Jamaica has become a vehicle for investment as well as insurance protection, with 60 per cent of all policies sold over the years including an investment component.
He further pointed out that the life insurance industry has over JM$360 billion in invested assets and is the largest player in the pension fund market with over JM$300 billion dollars in pension funds under management.
The IAJ officer disclosed that in 2020, the industry paid out JM$16.4 billion in general insurance claims, of which JM$13.6 billion were motor claims.
It also paid out JM$24.4 billion dollars in death and living benefits from their individual life insurance policies and JM$620.1 billion dollars in health insurance benefits. In total, the industry paid out over JM$60 billion dollars in policyholder benefits.
“It was gratifying to see that in 2020, despite financial constraints, there was an increase in the number of policies in force and there was a greater effort by persons to secure higher insurance coverage,” Dr Stokes noted.
He also appealed to the finance minister to speed up the legislation for microinsurance “so that persons with lower incomes will have an insurance solution that is more accessible, affordable and with simple ‘Know Your Customer’ requirements that will give major support to Government’s policy of financial inclusion.”
Insurance, he said, was critical, adding, “There is an old adage that says people do not plan to fail, they simply fail to plan. It is the same with financial planning. However, many people fail to understand that the best financial plan will collapse if it does not incorporate insurance planning.”
“If the breadwinner passes away unexpectedly or the house burns down without insurance, it would result in a significant financial setback for the family. This kind of contingency planning and risk management is essential, and if we were not convinced of its importance, then the COVID-19 pandemic was a reality check for all of us, right across the globe,” Dr Stokes said.