Working Paper Series: Special Edition of 2016 to 2018 Interns

increase in the following years due to the exhaustion of capital from the Property & Casualty sector (Swiss Re, 2018). Many factors contribute to the relatively high and volatile cost of insurance in the region, partly reflecting the limited financial reserves, high exposure to hazards, high administrative costs and great reliance on reinsurance.

Figure 4: Premium Paid Per Capita in the ECCU, 2000-2017 (EC$M)

Insurance Density

700

600

500

400

300

200

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Dominica

Grenada

SKN SVG

Source: Central Statistical Office, the World Bank and Eastern Caribbean Central Bank

One of the main indicators of insurance development within a country is total premiums per capita, otherwise known as the insurance density 52 . The diagram shows that the total premiums paid per capita exhibits an upward trend, this may be due to both increases in the premium and the number of persons who are insured as well as a reduction in the total population. Data from the World Bank revealed that the total population in the four ECCU member states 53 increased during the period of the study. Unfortunately, data on the customer base and individual premium rates for the entire ECCU is not accessible. However, based on information garnered from the Financial Services Commission in four of the ECCU member states, it was assumed that on average more

52 Insurance Density is the ratio of gross written premiums to total populations. It refers to the per capita premium or premium paid in EC dollar per person. 53 Antigua & Barbuda, Dominica, Grenada and St. Vincent and the Grenadines

186