No real threat to insurance industry, says ATTIC president

Published: Friday September 19, 2008

There is no real threat at the moment to Trinidad and Tobago's insurance sector as a result of the ongoing financial crisis in the United States, the local industry said yesterday.

Rani Lakhan-Narace, president of the Association of Trinidad and Tobago Insurance Companies (ATTIC) admitted that the problems in the US financial markets, particularly the fall of investment giant Lehman Bros and the bailout of insurer AIG in New York this week made people in Trinidad and Tobago nervous as there were "fears that banks and insurance companies would be adversely affected even to the point of pushing some local players into financial difficulties".

In a statement yesterday in response to queries by the Express, Lakhan-Narace said: "ATTIC wishes to assure the general public that at the present time there is no real threat to the stability of the insurance industry."

She said insurance companies were required by law to maintain at least 80 per cent of their policyholders' liabilities in local assets and these assets had to be pledged to the Central Bank.

In addition, most insurers did not invest the remaining 20 per cent in foreign assets.

For local insurance firms that had foreign investments, Lakhan-Narace said they might see a decline in the value of these assets but it was unlikely that their financial positions would be so affected as to threaten their survival or lead to a loss to policyholders.

"ATTIC will continue to monitor the situation as we live in an interdependent world," Lakhan-Narace said. "Our sense is that the demand for insurance services internationally could outstrip supply and ultimately the market will demand higher premiums which will ultimately have to be borne by consumers."


Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161377525