INSURANCE professionals and financial advisors have a critical role to play in both the medium-term and long-term economic recovery in Barbados.
This is the view of Minister in the Ministry of Finance Ryan Straughn, who was the guest speaker of the Barbados Association of Insurance and Financial Advisors (BARAIFA) 45th annual awards ceremony, which was held at the Sandals Royal Barbados on Saturday night.
According to Minister Straughn long-term investors will be needed to finance growth in Barbados.
â€śIf it is to be good growth, long-term growth, sustainable growth then we need long-term investors in this country. And the patient, long-term, sustainable investors in our financial system, have been and continue to be, life insurance professionals. By engaging in critical domestic investment, you bolster this economy and, indeed, investment in the government of Barbadosâ€¦â€ť
To this end he suggested that new financial instruments are needed where long-term investors can earn returns for their preference to be long-term. â€śInstruments like mortgage insurance or longevity insurance and even infrastructure investments like the new islands and peninsulas we are planning to build provide an avenue for diversifying the avenues that the modern insurance agent can turn to for investment. We will look kindly upon this kind of innovation, which allows the financial sector to be more fit for its purpose, and for long term savers to be better matched to long-term investments.
â€śIn the future, I want life insurers to behave like life insurers and credit unions to behave like credit unions and banks to behave like banks, I donâ€™t want everyone doing the same thing, offering the same products and risks.â€ť
Minister Straughn stated that it is critical for Barbados to have a diverse financial sector, engaging in appropriately diverse pursuits, as it is through diversity that a financial system gains strength and resilience.
â€śAs a government, we will facilitate you in bringing diverse and innovative solutions to long term investment in the Barbadian economy. In turn, you are charged with increasing customer engagement, fostering investment and modernizing both your insurance products and the channels through which you provide services.â€ť
Asking those in attendance to trust the process upon which the Mia Mottley- led administration has embarked, Minister Straughn acknowledged that regulation in the industry must be revisited.
â€śI know that much of our regulation, both on the national and international level, accounting practices and risk management can actually weigh against insurers taking long-term equity investments. However, the modernisation and increased efficiency of our government will diminish these obstacles and open the path for more long-term investment on your part.â€ť
â€śI also call upon you and I call upon my friend Avinash Persaud at the Financial Services Commission to begin a dialogue and conduct a review of the regulations for financial advisors to enable you all to play the right, sensible and safe, economic role as investors in the long-run.â€ť
â€śI know there is a regulatory preference for short-dated government paper among investors, as opposed to long-term private investment.
However, from an economic and investment perspective, long term investments make much more sense for those who need long-term returns.
To this end, Minister Straughn advised the industry professionals to utilise the available long-term investment options going forward, to the benefit of themselves and the economyâ€™s growth.
The Minister also noted that with the increasing number of younger persons in the workforce there will be the challenge of adapting insurance products and approach to business very quickly in order to garner their attention and attract business.
â€śWhat the modern insurance agent needs to do is more effectively target customers, widen and modernize distribution channels and develop products which are suited to the needs of todayâ€™s insurance client.â€ť
â€śHowever, these changing requirements are not to be perceived negatively. The way I see this evolution in the sector, is as an opportunity for insurance professionals to evaluate how you can adapt your services to the changing needs of the workforce of Barbados.â€ť (JH)