Opening Remarks by Warrick Ward, CEO, Financial Services Commission – BRIM(2023) Media Launch

Bridgetown, Barbados, March 3rd, 2023 -To the Board and management of BIBA, the Chairman of the FSC, fellow management and staff of the FSC, conference sponsors, ladies and gentlemen; good morning. It is a pleasure for us at the Financial Services Commission to partner with BIBA on the hosting of the third annual edition of the Barbados Risk & Insurance Management Conference – simply called BRIM. The organisers have compiled a distinguished group of experts and policy makers from the risk and insurance industry, who will generously share their perspectives on the industry’s latest developments and the future in general.

Now as the regulator, of Barbados’ non-bank financial institutions, which includes the insurance sector, we view our involvement with the conference as an important strategic exercise. For us, with responsibility for regulating and supervising the country’s insurance, securities, credit union, and pensions sectors, our mission is to promote the development of a well-regulated, vibrant, competitive, and innovative financial services industry that meets the needs of local and international stakeholders.

Overall, we regulate approximately 1,500 licensees – 986 insurance companies and intermediaries combined, 29 credit unions, 247 occupational pension plans and 27 mutual funds, 19 securities companies and not to mention over 100 brokers, traders, investment advisors and other market participants. In keeping with the roots of this conference, to properly regulate the various market actors, we have adopted a risk-based regulatory approach where we assess the degree of risks the operations of licensed entities pose to the financial system and prioritise the
assessment of those entities.

With regards to the insurance sector, it continues to grow, but in 2022 there was some indication
of the softening on the market cycle, largely driven by a range of exogenous factors such as
climate risk, inflation and notable increases in reinsurance costs. Nonetheless in 2022 there were
10 new captive formations last year, compared to the 34 new ones in 2021.

As at December, the FSC recorded 187 registered Class 1 companies with an estimated asset
value of BDS$54.1 billion. For those of you not familiar with our classifications, a Class 1 licensee
is an insurance company that underwrites related party business. Class 2 refers to an entity that
underwrites third-party risk and a Class 3 Licensee is an insurance intermediary, an insurance
management company, or an insurance holding company.

Likewise, as at December, there were 98 Class 2 licensees on our books with an estimated asset
value of BDS$208.3 billion. The bulk of the captive insurance business continue to originate from
Canada which accounts for 51% of registrants, followed by the US with approximately 25%. With
respect to those entities with direct exposure to Barbados, there are 20 major players – comprising 14 non-life companies and 6 life companies with asset values of BDS$1 billion and BDS$2.7 billion, respectively.

There have been varying degrees of activity in this sector, but over the last five (5) years we have witnessed 2 new formations and 3 company mergers. This, especially the merger activity, could be a signal that there has been greater emphasis on deriving greater efficiencies among market participants. I am sure that this will form part of the discourse during the BRIM conference.

Overall, I expect a productive exchange of ideas, methods and points of view in all areas of risk and insurance. On behalf of the Commissioners, the management and staff of the FSC, I wish you a successful and engaging conference (FSC)