Best’s Commentary: Pandemic Spurs Innovation Initiatives Among Caribbean Insurers

OLDWICK, N.J.--(BUSINESS WIRE)--Rated Caribbean insurers’ quick reactions to the challenges posed by the COVID-19 pandemic highlight recognition that carriers in the region have about harnessing innovation for long-term success, according to a new AM Best report.

In its new Best’s Commentary, titled, “Pandemic Spurs Innovation Initiatives Among Caribbean Insurers,” AM Best notes that Caribbean insurers had relied on a largely paper-based transactional business model based on face-to-face client interaction. Digitization and remote working concepts were still somewhat nascent among Caribbean insurers at the onset of the pandemic. COVID-19 accelerated the digital transformation of the Caribbean insurance industry, as the pandemic forced businesses to operate in a remote environment. Persistently low investment yields and stagnant growth also has contributed to the industry pressure.

“In AM Best’s view, innovation is critical to the long-term success of all businesses, including insurers,” said Ricardo Longchallon, senior financial analyst, AM Best. “Well-structured innovation allows a carrier to develop sustainable competitive advantages and better respond to financial challenges, including stagnant growth or deteriorating expense ratios.”

Although innovation initiatives among Caribbean insurers have been somewhat limited thus far, AM Best expects these initiatives to grow in importance as insurers struggle to remain competitive and differentiate themselves in crowded markets. At a minimum, systems upgrades and emerging technology are a necessity for Caribbean insurers to maintain pace with their regional peers and the general insurance industry.

“Rated Caribbean insurers recognize the need to continue to invest in and upgrade operating platforms if they are to capitalize on emerging technologies and improve operational efficiencies, but doing so is subject to cost and resource constraints,” said Anthony Molinaro, senior financial analyst, AM Best.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=320407.

A video discussion with Molinaro about this commentary can be viewed at http://www.ambest.com/v.asp?v=ambcaribbean522.

For full details on AM Best’s approach to an insurer’s innovation initiatives and its impact on a company’s business profile, please visit Scoring and Assessing Innovation.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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