OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best’s annual survey of the Caribbean Association of Insurance Regulators (CAIR) member countries found that the overall insurance industry for countries that participated remained profitable for a seventh consecutive year, with an overall combined ratio of 83.8% in 2015, a significant improvement over the 95.5% recorded in the previous year.
The new Best Special Report, titled, “CAIR 2017 – Improved Operations Offset Decline in Investment Income,” examined the results of the CAIR member countries survey, which collects key metrics on the condition of the insurance industry in the Caribbean. The survey was sent to each country’s regulator and has collected data from 2009 through 2015.
According to the report, direct premiums written (DPW) increased by 3.9% to USD 4.3 billion in 2015. St. Kitts and Nevis experienced the largest DPW increase, with an 89% year-over-year rise to USD 43.1 million. With USD 779.0 million in DPW, Trinidad and Tobago insurers contributed the most DPW in 2015 to the total DPW amount written by CAIR countries that participated in the survey. The Bahamas, the fourth-largest insurance market among CAIR members, saw its DPW decline by 11.7% to USD 668.5 million.
Investment income for the CAIR countries fell by more than USD 43 million, to a reported USD 511 million in 2015 from USD 559 million in 2014; however, the decline was more than offset by a drop in underwriting expenses, to USD 977 million in 2015 from USD 1.3 billion 2014. After-tax net income was USD 399.3 million in 2015, which represented an 18.8% increase over the USD 336.1 million recorded in 2012 for the 13 countries for which consistent data exists.
The CAIR member countries surveyed represent close to 7.4 million people and in 2015, and more than USD 75.0 billion in annual gross domestic product. Of the 22 member countries, 20 countries participated in the 2015 data collection process. As the countries in the region are widely diverse with varying reporting requirements, accounting standards and regulatory requirements, the results vary from country to country on some levels.
Given expectations of GDP growth in the region for 2017, deeper market penetration and improved profitability is possible going forward. The CAIR insurance market remains well capitalized and profitable. Market participants have been able to lower underwriting expenses, which has offset a decline in investment income. With over 350 companies in the various markets, the region remains well served with products and competitive pricing. Increased global regulation and financial market scrutiny will maintain pressure on regulators to provide transparent and timely data on the markets they serve, and as the markets mature and grow, A.M. Best will continue to track, monitor and report on these changes.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=262694.
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