Regional Insurance Companies Encouraged to Capitalise on Opportunities in Tourism Sector

With tourism in Jamaica and the wider Caribbean booming, the time is ripe for regional insurance and financial institutions to capitalise on the many opportunities that are available, says Minister of Tourism, Hon. Edmund Bartlett.

Speaking at the opening session of the 41st Annual Caribbean Insurance Conference at the Hyatt Ziva, Rose Hall, St. James, on June 5, the Minister said the current climate could not have been more inviting.

“You can be a vital partner” in a model of tourism that provides good economic opportunities for “our island nations” and a better life for the people of the Caribbean, Mr. Bartlett told the participants.

The Minister said the insurance industry represents a critical component of the Jamaican story and is one of the prime engines for the financial services industry, as it is across the Caribbean.

“The insurance industry in Jamaica grew 8.7 per cent, on average, between the years 2015 and 2020 and had a market size of $998.1 million in 2021,” Mr. Bartlett pointed out.

He reminded the audience, comprising mostly insurance practitioners, that they should not lose sight of the reality that many [insurance] companies are being forced to conduct business under stricter financial terms that may constrict their ability to do business, such as increased interest rates to reinsurance investors of between 20 and 40 per cent, and reduced reinsurance cover.

This squeeze, Mr. Bartlett said, will force the insurance industry to focus on its investments that back its reserves and capital, adding that the Ministry of Tourism proposes that consideration be given to investing in the Jamaican tourism industry, whether through accommodation, attractions, or transportation.

“This is why it makes a lot of sense to invest in this lucrative tourism industry, whether through investments in tourism entities or providing insurance and financial instruments that incentivise sustainable practices. This may not necessarily call for new instruments, but rather doing more to connect tourism entities with existing instruments,” he said.

The Minister argued that with Caribbean tourism set to earn an estimated US$50 billion by 2026, US$3.89 billion of which will go into travel insurance for the region, “the initiative we are proposing can only be a win-win for all.”

“We are also going to be employing 1.34 million more workers across the region during that period, bringing the tourism workforce in the Caribbean region up to 2.3 million by 2026,” he added.

Meanwhile, Mr. Bartlett said that tourism and agriculture were the two sectors most vulnerable to climate action, and also characterised by having 67 per cent of their workforce being at the lowest end of the employment stream.

He noted that oftentimes when disruptions hit, those workers are among the last to recover, if at all.

The Minister said he is prepared to sit with the insurance sector to devise a tool to give workers some peace of mind, “being mindful that there would be more disasters,” including hurricanes and floods, depriving people of their homes and farm plots.

“We need to find a tool that says here is a relief, something that you can have while you recover,” Mr. Bartlett added.

The conference was held under the theme ‘The Insurance Industry’s Role in the Pursuit for Sustainability’.