2018 Financial Stability Report

C HAPTER 3:

F INANCIAL

P ERFORMANCE AND

S OUNDNESS OF C OMPANIES

N ON-

D EPOSIT-

T AKING

I NSTITUTIONS:

I NSURANCE

Figure 33: ECCU Insurance Sector Total Assets (in EC$ Millions)

3.0

Overview

$2,200.00

The insurance sector is a cornerstone of the ECCU financial system, especially as it pertains to the transfer of risk. Following the passage of hurricanes Irma and Maria in 2017, the insurance sector rebounded in 2018. Overall, the insurance sector in the ECCU was stable in 2018, as solvency metrics exceeded regulatory minimums, premiums increased and there was a small marginal increase in profitability. Performance across the ECCU countries was asymmetric but broadly positive. The total assets of the ECCU insurance sector was estimated at EC$2.2b at the end of 2018 6 , slightly above when compared with EC$2.01b recorded at the end of 2017 (Figure 33).

$2,100.00

$2,000.00

$1,900.00

$1,800.00

2015 2016 2017 2018

Source: SRUs and Eastern Caribbean Central Bank (ECCB)

Gross premiums rose to EC$1.3b, up from EC$1.2b at the end of 2017 (Figure 34). Both non-life and life insurance companies contributed to the growth in gross premiums. Notwithstanding, insurance companies do not retain all the premiums that they write. There are reinsurance allocations, giving rise to the net premiums written. Net premiums totalled EC$456.6m at the end of 2018. This gave rise to a 35.9 per cent risk retention ratio for the insurance companies. The general increase in premiums reflects two factors; (1) an increase in premium rates

6 Complete data for Antigua and Barbuda was not available at the time of writing this report

Financial Stability Report 2018

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