WHAT MATTERS MOST: Coping
THE INSURANCE INDUSTRY has been a winner since its effective inception in the early 1970s and it is capable of coping with the current setback, if it truly believes in the words of the country’s largest insurance company that “the best way to predict the future is to create it”. Whatever the economic environment, insurance and financial advisors have to pay more attention to the core issues that made them winners in the first place: (1) ability, (2) appearance and (3) attitude.As far as ability is concerned I can think of no other profession in Barbados, in which the level of training seems to be as on-going as in the insurance industry. This is precisely why the industry is able to refer to its accomplished agents as financial advisors because they are; and an appropriate title is an important part of the marketing process. If ability is important, then it is even more important to have the right attitude especially for providing a service and equally in dealing with the investing of people’s hard earned income.But what really makes the advisor a winner are the following: (1) the ability to provide excellent service, (2) the right attitude to deliver unquestionable integrity and (3) the appearance of earning a living while making life worth living for others.This industry effectively started in 1972 and is increasingly being dominated by companies incorporated in Barbados in both life and general insurance.In fact, domestic companies continue to consolidate their position as a major part of the financial services sector of Barbados, as evidenced by the growth in gross direct premiums, sums assured and investments. But in the absence of new areas of economic opportunities for growth, Barbadians on fixed incomes are finding the current recession very challenging and will continue to do so in the foreseeable future. While the unemployment rate has not yet soared because of some degree of corporate responsibility being practised by the private sector several workers are earning less because of shorter work hours.Therefore the industry has to be innovative in creating products which see the future as more optimistic than the present. This view will prevent the industry from offering high interest yielding products and plans that cannot be realised; instead, a sensible investment product that starts with a low interest rate and anticipates a rising interest rate regime in the medium term seems more realistic. This could be supported by an appropriate fiscal policy.As interest rates rise in the medium term, the industry has also to be innovative in the area of mortgages and loans. The circumstances of Barbados becoming less appealing investment wise and the British looking inwards for new investment may tend to create opportunities for local businesses and individuals. The model that has made the industry a winner since its inception is still available, but it has to be modified to take advantage of an economy that cries for a new direction.Since Independence, the Barbados economy has had to cope with the 1973 oil crisis, the 1981 gulf crisis, the 1991 fiscal crisis; it averted the 911 crisis because of swift Government action. Given the above, the current crisis differs in its length and the intensity of the fiscal crisis without so far the accompanying foreign exchange shortage experienced in 1991/92.The insurance industry coped with each of the crises and it will now have to manage with a challenge of a reputational nature as the industry copes with the CLICO debacle. There will be challenges as regional economies grapple with the financing requirements to resolve this issue.But there is opportunity for innovation!