Ger­ald Hadeed is a man who has ex­ist­ed in two worlds. As a busi­ness­man and chief ex­ec­u­tive of­fi­cer of Bea­con In­sur­ance com­pa­ny, he has shep­herd­ed the com­pa­ny's growth from an as­set base of $35 mil­lion in 1996, to over $500 mil­lion to­day.

As a politi­cian, he has held two min­is­te­r­i­al port­fo­lios (Min­is­ter of Tourism and Min­is­ter of Com­mu­ni­ca­tion), been the chair­man of a state com­pa­ny (Air­ports Au­thor­i­ty of T&T) and, more re­cent­ly, he has held the po­si­tion of an op­po­si­tion sen­a­tor.

Nev­er one to shy away from shar­ing his thoughts on mat­ters, the Busi­ness Guardian in­ter­viewed Hadeed at his of­fice in Port-of-Spain to dis­cuss his tran­si­tion back to pri­vate life, his thoughts on the in­sur­ance in­dus­try and whether he be­lieves T&T has the where­with­al to emerge suc­cess­ful­ly from its cur­rent eco­nom­ic sit­u­a­tion.

Strad­dling two worlds

On the Sep­tem­ber 4, 2015, Ger­ald Hadeed's tenure as Min­is­ter of Tourism came to an end. Hav­ing man­aged two min­is­te­r­i­al port­fo­lios and chaired a state board, Hadeed be­gan the tran­si­tion back in­to pri­vate life. Nat­u­ral­ly, he went back in­to what he knows best: busi­ness. Af­ter all, be­ing a busi­ness­man is in his blood.

His fa­ther, Az­iz Hadeed, found­ed the Caribbean In­sur­ance Com­pa­ny Ltd in the 1970s and, in 1996, Hadeed would re­brand the com­pa­ny as the Bea­con In­sur­ance Com­pa­ny.

Through his lead­er­ship and com­mitt­ment to his em­ploy­ees and cus­tomers, Bea­con has grown to be­come a sta­ple in the lo­cal in­sur­ance in­dus­try.

"I went in­to gov­ern­ment to learn how a gov­ern­ment op­er­ates. How they re­ceive their in­come, how they spend their in­come, how they man­age and how they bal­ance com­pet­ing in­ter­ests," Hadeed said in a re­flec­tive tone.

"I've al­ways been in­volved in pol­i­tics but tak­ing up a min­is­te­r­i­al port­fo­lio was a busi­ness de­ci­sion to al­low me in­sight in­to what the de­vel­op­ments in T&T will be over the com­ing years."

When asked what he be­lieves the Gov­ern­ment can learn from the pri­vate sec­tor, Hadeed said un­equiv­o­cal­ly, "Man­age­ment," adding: "The Gov­ern­ment needs to train its em­ploy­ees, gov­ern­ment needs to re­spect its em­ploy­ees so that they can per­form pub­lic ser­vice at the high­est lev­el."

Stat­ing that his busi­ness is stronger now than when he left it, Hadeed made the point that good man­age­ment and prop­er plan­ning should be the ba­sis on which gov­ern­ment de­ci­sions are made.

"When I left (Bea­con) and came back, the busi­ness grew, a tes­ta­ment to the qual­i­ty of man­age­ment in the com­pa­ny. If gov­er­ment adopt­ed more busi­ness-like prac­tices, things would be bet­ter."

Fi­nan­cial re­coloni­sa­tion

Hav­ing been in the in­sur­ance busi­ness for over 40 years, Hadeed is of the view that the oner­ous reg­u­la­tions in the fi­nan­cial ser­vices sec­tor, par­tic­u­lar­ly for in­sur­ance com­pa­nies, are lead­ing to what he de­fines as a form of "fi­nan­cial re­coloni­sa­tion,"

"The colo­nial mas­ters may no longer be phys­i­cal­ly here, but what is hap­pen­ing with many fi­nan­cial in­sti­tu­tions is we are be­ing re­colonised by way of fi­nan­cial reg­u­la­tions.

"The new In­sur­ance Act, and the bur­den­some na­ture of fi­nan­cial reg­u­la­tions is forc­ing us to do more rein­sur­ance which re­duces the pool of avail­able cap­i­tal to de­vel­op the do­mes­tic and re­gion­al in­sur­ance in­dus­try. More mon­ey is go­ing out to for­eign rein­sur­ers who are re­turn­ing to us on­ly com­mis­sions. We (in­sur­ance com­pa­nies) have ab­solute­ly no say in any­thing to do with our fi­nances."

Asked about the height­ened reg­u­la­to­ry en­vi­ron­ment post-Cli­co, Hadeed sees the changes as analagous to "tak­ing a sledge­ham­mer to an ant's nest" de­scrib­ing Cli­co as one com­pa­ny that got in­to trou­ble, but all the oth­er com­pa­nies were meet­ing there reg­u­la­to­ry re­quire­ments.

In­dus­try con­sol­i­da­tion

With the re­lo­ca­tion of the head of­fice of re­gion­al fi­nan­cial ser­vices group Sagi­cor from Bar­ba­dos and the pur­chase of a large block of Guardian Hold­ings shares by Na­tion­al Com­mer­cial Bank of Ja­maica (NCBJ), the in­sur­ance in­dus­try has been the sub­ject of me­dia cov­er­age in re­cent times.

When asked about the in­dus­try con­sol­i­da­tion tak­ing place, Hadeed said this trend is like­ly to con­tin­ue.

"More con­sol­i­da­tion is like­ly to take place," he said. "Some small com­pa­nies have al­ready been ac­quired and a few oth­ers are like­ly to go out of busi­ness be­cause of an in­abil­i­ty to meet the reg­u­la­to­ry re­quire­ments. I ex­pect that when all is said and done, there may be about four or five com­pa­nies left lo­cal­ly."

When asked if Bea­con would con­sid­er be­ing ac­quired, Hadeed said: "Bea­con is not for sale."

The re­gion­al out­look

With branch of­fices in Bar­ba­dos, St Lu­cia and Grena­da and agents op­er­at­ing in St Kitts and Nevis, Do­mini­ca and St Vin­cent, Bea­con has a sol­id re­gion­al pres­ence in the in­sur­ance in­dus­try. How­ev­er, close to 77 per cent of the com­pa­ny's rev­enue base is gen­er­at­ed in T&T.

Hadeed is pos­i­tive about the com­pa­ny's per­for­mance in the re­gion.

"One has to re­mem­ber that the is­lands have been quite de­pressed since the glob­al fi­nan­cial cri­sis. Re­duced spend­ing on trav­el and even high oil prices had a ma­te­r­i­al im­pact on the is­lands. We ex­pect that busi­ness in these is­land will pick up in the com­ing years as the economies are start­ing to turn the cor­ner."

The in­sur­ance in­dus­try and the re­ces­sion

Com­ment­ing on the con­tract­ing do­mes­tic econ­o­my and the im­pli­ca­tions for the in­sur­ance in­dus­try, Hadeed said peo­ple tend to un­der-ap­pre­ci­ate the val­ue of their in­sur­ance pol­i­cy in re­ces­sion­ary times.

"In a re­ces­sion hav­ing ad­e­quate in­sur­ance cov­er­age be­comes even more es­sen­tial al­though in­di­vid­u­als tend to repri­ori­tise in­sur­ance spend to the bot­tom of the list. My ad­vice would be that na­tion­als should look for the best val­ue when pur­chas­ing in­sur­ance, and ex­am­ine all pos­si­ble ways of mit­i­gat­ing risk.

"For ex­am­ple, en­sur­ing that your car and prop­er­ty are prop­er­ly in­sured by mak­ing sure that both are ex­am­ined thor­ough­ly and hav­ing the risks com­plete­ly eval­u­at­ed and the nec­es­sary im­prove­ments com­plet­ed."

Hadeed is al­so of the view that as times be­come more dif­fi­cult, high­er lev­els of malfea­sance can be ex­pect­ed in the in­dus­try. "We fore­see this time around that the lev­el of fraud will in­crease both in terms of fre­quen­cy and sever­i­ty and will be much more so­phis­ti­cat­ed which will make it dif­fi­cult to de­tect and re­solve," he stat­ed.

Hadeed does, how­ev­er, be­lieve that the in­sur­ance in­dus­try has a vi­tal role to play in these times by main­tain­ing lev­els of em­ploy­ment, of­fer­ing fair prices and stay­ing in­volved in com­mu­ni­ty ac­tiv­i­ties.

For­eign ex­change

Hadeed point­ed out that al­though most peo­ple may not recog­nise it, the in­sur­ance in­dus­try is heav­i­ly de­pen­dant on for­eign ex­change to meet its rein­sur­ance re­quire­ments.

"Ap­prox­i­mate­ly 90 per cent of all prop­er­ty, con­trac­tors all risks, ma­rine and cat­a­stro­phe cov­er are done ex­ter­nal­ly with rein­sur­ers. For­eign ex­change is re­quired on a quar­ter­ly ba­sis to pay rein­sur­ers for these ex­ter­nal risks. It has be­come very chal­leng­ing to ob­tain for­eign ex­change from the banks to pay rein­sur­ers.

"This sit­u­a­tion can­not con­tin­ue and the in­dus­try is hop­ing that the Cen­tral Bank gives pri­or­i­ty to in­sur­ance com­pa­nies to meet their dead­lines as this may have far reach­ing con­se­quences for the in­sur­ance in­dus­try if we con­tin­ue not to pay on time."

Call­ing him­self a "na­tion­al­ist", Hadeed be­lieves that his ac­tions have demon­strat­ed his com­mitt­ment to T&T. "I be­lieve in my coun­try, I love my coun­try," Hadeed stat­ed em­phat­i­cal­ly.

Com­par­ing the chal­lenges the coun­try faces now with those in the 1980's, Hadeed re­mains op­ti­mistic about the na­tion's prospects.

"The 1980s was the first time that Trinidad ex­pe­ri­enced a down­turn and this was af­ter a very short pe­ri­od of ac­cel­er­at­ed growth. On this oc­ca­sion, the down­turn comes at a time when we have had a sus­tained pe­ri­od of eco­nom­ic growth and de­vel­op­ment which will of­fer a more sol­id foun­da­tion for the coun­try to move for­ward. We should there­fore be able to weath­er this storm a bit bet­ter pro­vid­ed that the re­sources are man­aged ef­fi­cient­ly."