Denis St. Bernard, Contributor
As the local insurance sector continues to transform itself there are a number of calls from sector bodies, leaders and the public at large for "change agents" to come forward to quickly facilitate these changes.
To this end a number of local associations have been targeted.
According to Gordon Brandon, an insurance judicial manager, "first on the agenda is the revamping or merging of a number of associations and interest groups, in the sector, which have now outlived their usefulness."
Mr. Brandon, a past board director of the Insurance College of Jamaica and a director representative of the Insurance Association of Jamaica, said that if these various associations were doing what they were set up to do, there would be no need to be now looking towards a new Insurance Act, and regulations, to regulate the sector. The sector should now be in a position to regulate itself.
He believes that no amount of outside regulations or new Acts will solve these problems. There first have to be the will and an attitude change, so that the high level of professionalism which once existed could return. "The sector bodies need to be reactive and mobilise their various membership into positive actions which will improve the overall standards in the sector. Staff is brought into the sector without proper training and they are not being taught why you do what you do", he said.
One such association is the General Insurance Agency Association, a body whose members are now facing an uphill challenge by the new capitalisation requirement imposed by the Superinten-dent of Insurance (SOI). In the recent past some agents survived with capital as low as $10,000. Now the SOI office is requesting a minimum capital of $5 million and it is expected that under the new Act this amount might be even higher.
Agency Association president, Keith Davis, said in a recent interview that the entire market is going through some massive changes and that the new capitalisation requirement, together with the market pressures are putting a lot of agents out of business.
Criticism
He speculated that there might be just about 23 active agents operating in the market today, coming from more than 40 just a couple years ago. Mr. Davis said that if there was one criticism he sees in the new Insurance Act is lack of appreciation for the smallness of our sector and therefore drafters should take cognizance of the fact that although one has to be global in one's thinking , the reality of what is and what currently exists must be taken into consideration.
Mr. Davis also highlighted that "change agents" with a new and effective way of doing things need to come forward quickly to assist in this transformation.
Mr. Davis' counterpart in the life side of the sector, Courtney Golding, president of the Life Underwriters Associa-tion of Jamaica (LUAJ) was more conservative in his views of the need for quick and dynamic changes.
Mr. Golding lamented the fact that the LUAJ has been in operation for over 63 years and the association would have to examine the issues carefully before contemplating merging with any other entities. His membership has recognised the need to do things differently as a result of the changes in the market. In recognition of this, Mr. Golding added that the LUAJ has recently passed a resolution for a name change to The Jamaica Association of Insurance and Financial Advisors (JAIFA).
"Clients want things to be done quickly and efficiently; need selling is now the main focus, as we now have to refocus on changing back to our core business, e.g. individual life cover, health / critical illnesses, which is on the increase, personal accident etc," Mr. Golding said.
Some industry experts feel that a merging of these two entities along with other similar interest groups such as the Brokers Association, which are all intermediaries, will be a positive move forward, especially as the lines between the products and services they all offer continues to disappear.
Even the locally regulatory framework is now preparing to merge all financial products and services into one Financial Services Act, which is now a global trend.
Another association in the sector facing challenges is the Insurance Institute of Jamaica (IIJ), whose chairman Andrea McLennon, recently urged her board that not only do they need to be perceptive, but that there is no reason for them not to be instrumental in meaningful changes in an already changing environment.
Leslie Chung, deputy chairman of the Jamaica Association of General Insurance Companies (JAGIC), when asked about JAGIC'S role as a change agent was quick to agree that it cannot be business as usual.
"We just cannot be what we were 10 to 15 years ago, the insurance sector is undergoing rapid changes and we have to be far more responsive to our consumers. At the moment JAGIC is in the process of reviewing its existing Charter, mission statement and its short, medium and long term objectives in an effort to determine its future role and to remain relevant in today's global marketplace.
"To accomplish this task JAGIC will be looking at forging greater linkages with a number of bodies such as Life Insurance Companies Association (LICA), the police, RPD etc. We will also be looking at some success stories such as the Association of Insurance Companies Secretariat in Trinidad and Association of British Insurers in the UK to incorporate into our new drive to be a positive change agent", he said.
Rosemary Heaven, general manager of the Life Insurance Companies Association (LICA), was cautious in saying that LICA has already documented all that it does and was now is the process of going through their strategic plans for a new way forward.
LICA recently experienced a major drop in their membership due to the fallout in the financial sector which severely affected the life insurance sector. Some of the activities of LICA includes : (a) The gathering of data to compile industry statistics. (b) Lobby government on behalf of its members and policyholders. (c) Organise public education programmes and public relations activities for the industry.
In conclusion it was heartening to see that at least all the players in the sector were fully aware that there were a number of changes needed and quickly, in an effort to move the sector forward. Let's see what the future will bring as the associations redefine themselves.
Denis St.Bernard is an insurance & marketing consultant. He is also the Co - host of risky business aradio programmer which deal with risk & insurance matters. feedback to email - pri@kasnet.com
