While new insurance legislation currently before Parliament seeks to ensure that companies have appropriate risk based capital requirements, that will not treat with the poor service insurers offer clients.So said Carl Hirarlal, inspector of financial services at the Central Bank of T&T when he spoke at a ceremony to re-launch Gulf Insurance Limited as a subsidiary of Suriname's Assuria Group at the Hyatt Regency in Port-of-Spain.
"Companies must ensure that consumers understand the limitations, risks and the nature of the products that are being sold to them. Hirarlal said."Companies need to take a long term view of the consumer and develop products that take into consideration the culture and society in which they are distributed. I am sure that if I were to ask the audience what is the main challenge they face with respect to the non-life insurance life insurance sector, the overall response would be claims handling/settlement for motor insurance."
He added: "I must admit that this is a major concern of the Central Bank as this has far reaching implications for the stability of the sector. More regulations will not, by themselves, guarantee a sound insurance industry."What is also required is strong corporate governance, the right corporate culture and taking a genuine interest in the customer. One must never lose sight of the fact that consumers are well served when financial institutions operate on the basis of price, product and service."
Hirarlal said when problems arise, what the customer remembers is not the complaint, but the outcome. Taking a long term view of the customer, he said, has a financial dimension."Selling the right product to the right consumer at the right time is crucial to the long-term survival and reputation of any company. Boards and management needs to guard against reducing the value of the company to the performance of its last quarter. In the long run, this myopic view will neither benefit shareholders nor policyholders," he said.
He expressed confidence that Assuria's management had embraced his views, or it would not have been the company it is today. Hiralal said local regulators expect not only growth from the new company, but provision of good products and services to consumers, while creating more jobs for the citizens and contributing to development of the economy.Assuria's entry into the local market, said Hiralal, was timely because of the fundamental changes to the regulation and supervision of the insurance industry currently underway.
"The consummation of this new relationship should not only strengthen Gulf Insurance Limited's balance sheet, but should redound to the benefit of the public as Gulf is expected to benefit from Assuria's considerable expertise. We have been advised that it is the largest financial institution in Suriname and offers a broad range of life, casualty and health insurance products in Suriname and since March 2012 in neighbouring Guyana," said Hiralal.
He added: "Assuria holds a 49 per cent share position in De Surinaamsche Bank NV (DSB), the largest retail bank in Suriname. Its asset base totals approximately TT$1.2 billion as at December 2011. Assuria has spread its wings throughout the Caribbean, having investments in Curacao, Guyana and now T&T. We are confident that Gulf Insurance Ltd, through its new owners, has the financial capacity to meet both the current proposed legislative capital requirements."