2018 Financial Stability Report

Figure 35: Combined Ratio Insurers

following the catastrophic events hurricanes of 2017 as well as, (2) an increase in the customer base.

Combined Ratio

95.0% 100.0% 105.0% 110.0% 115.0%

Figure 34: Gross Premiums and Net Premiums

$1,500.0

2015 2016 2017 2018

$1,000.0

Source: SRUs and Eastern Caribbean Central Bank (ECCB)

$500.0

The sector remained solvent. As at the end of 2018, the capital to assets ratio stood at 78.8 per cent, while the net premiums to capital ratio was estimated at 29.3 per cent (Figure 36). The solvency margin 7 , another solvency metric, exceeded regulatory limits for all ECCU countries. As at the end of 2018, the average solvency margin was well over 100.0 per cent. Capital to technical reserves stood at 153.0 per cent compared with 150.0 per cent at the end of 2017. Capital strength, however, varies across insurers, and some insurers have relatively small buffers over the minimum capital requirements.

EC$ Millions

$-

2015 2016 2017 2018

Gross Premiums

Net Premiums

Source: SRUs and Eastern Caribbean Central Bank (ECCB)

There was a slight deterioration in profitability for 2018. The combined ratio increased to 112.1 per cent at the end 2018 from 110.5 per cent (Figure 35). The increase in the combined ratio reflected an increase in the expense ratio while the loss ratio fell.

7 The solvency margin is the amount of capital insurance companies are required to hold in relation to the premiums they write (on average 20.0% of

premiums). These are the assets eligible to cover technical provisions

Financial Stability Report 2018

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