1. Inclusive Insurance Training for Insurance Supervisors
Jamaican Case Study

2. Structure of Case Study
Context
Demand & Supply Issues
Regulatory Issues
Next Steps
Image: Strawberry Hill, St. Andrew, Jamaica

3. Image: Rio Grande, Portland, Jamaica
Context
Image: Rio Grande, Portland, Jamaica

4. Context
Jamaica is an independent island nation with an estimated population of 2.7 million (as at December 2015).
Source: Statistical Institute of Jamaica

5. Context The largest employers include: Wholesale & Retail Trade
Agriculture, Hunting, Forestry & Fishing
Hotels & Restaurants
Source: Statistical Institute of Jamaica

6. Context Jamaica’s informal economy is significant in size and impact.
Image: Craft Market

7. Context
In 2001, an Economic and Sector study estimated that the Jamaican informal economy represented over 40% of the overall economy.
Source: “The Informal Sector in Jamaica”, Inter American Development Bank

8. Context
In the year of a natural disaster, growth in GDP tends to slow due to reduced productivity, loss or agricultural output and reduced tourism arrivals.
Source: ABC News

9. Jamaica: Demographics & Labour Market
A study of the coping strategies employed by Caribbean tourism and agriculture workers after a weather event revealed that insurance was rarely utilized.
Less than 3% of Jamaican respondents relied on an insurance payout after the most recent weather event.
Source: “Demand for Weather Related Insurance and Risk Management Approaches in the Caribbean”, Federal Ministry for Economic Cooperation and Development

10. Group Discussions
What are the similarities and differences between the Jamaican context and your own jurisdictions?
Do you perceive that there is a need for insurance among the low income and the underserved population in Jamaica or in your jurisdictions?
Why or why not?

11. Image: Swallowtail Hummingbird, Jamaica’s National Bird
Context
A country diagnostic was conducted in Jamaica as a part of a joint project between the Inter-American Development Bank (IADB) and the Access to Insurance Initiative (A2ii).
“Implementation of Regulatory and Supervisory Standards in Microinsurance Market in Latin America”
Image: Swallowtail Hummingbird, Jamaica’s National Bird

12. Context
The goal of the project is to promote availability of sustainable insurance products well suited to the needs of the low income population in the region
One resulting report “Improving access to insurance for the low-income population in Jamaica” was published in August 2014
Similar work was undertaken in Columbia and Peru.

13. Demand & Supply Issues
Jamaica’s large informal sector contributes to the size of the potential microinsurance target market.
Demand survey results suggest that the microinsurance target market are vulnerable to a range of financial risks.
However, insurance is not a popular form of risk mitigation. Savings, loans and help from family (local or overseas) are far more popular.

14. Demand & Supply Issues
Jamaicans interact with financial institutions outside of that banking sector (e.g. money transfer service providers) that are prospective microinsurance distribution channels.
Three insurance (3) companies already offer products that can be classified as microinsurance. These were forced into the existing regulatory framework.

15. Demand & Supply Issues Insurer 1
Utility payment protection plan is offered to loyal customers and will pay the customer’s utility bill for two months if (s)he becomes disabled
Parametric weather-based insurance product will pay a benefit once pre-set wind speed or rainfall triggers are activated.
Personal accident policy provides an accidental death benefit and medical expense reimbursement
Insurer 2
Credit life insurance
Life insurance
Funeral indemnity
Insurer 3
Health insurance plan included under the government’s social security programme

16. Regulatory Issues
There is not an established procedure for the registration of microinsurance products
The current legislation permits insurance products to be distributed only through brokers, agents and sales representatives.
The current legislation does not consider mobile banking and other innovations.

17. Group Discussions
What are some demand, supply and regulatory issues that may restrict access to insurance in Jamaica?
Are there similarities and differences with your own jurisdictions?

18. Next Steps
Recommendation: Dedicated regulatory regime for responsible inclusive insurance
Recommendation
Action
Adopt a regulatory definition of microinsurance
In discussion.
Remove access barriers for risk carriers and distribution channels
Speed up and simplify processes

19. Next Steps Recommendation: Improve the supply of products
Action
Improve the capacity of providers
Invite industry stakeholders to multiple inclusive insurance events hosted by the FSC.
Encourage insurers to offer products with value to consumers

20. Next Steps Recommendation: Improve the demand for products
Action
Collaborate on national financial inclusion strategy
Continue FSC’s financial education programme. Participate in national financial inclusion strategy.
In particular, promote financial education
Interact with target market through inclusive insurance events hosted by the FSC and media broadcasts.

21. Next Steps Recommendation: Capacity building for FSC Recommendation
Action
Lead a cohesive industry effort
Lead Inclusive Insurance Committee
Form an FSC internal committee as a learning platform
Cross-divisional internal committee collaborates on inclusive insurance matters
Foster peer exchange
CAIR, ASSAL, IAIS
Participate in international and regional training
A2ii

22. Next Steps Recommendation: Capacity building for FSC
IAIS Financial Inclusion Working Group – Drafting Group on Index Based Insurance
IAIS Financial Inclusion Working Group – Drafting Group on Digital Technology

23. Next Steps Recommendation: Capacity building for FSC
Access to Insurance Initiative
International Labour Organization

24. Next Steps Recommendation: Capacity building for FSC
Micro Insurance Centre
Toronto Centre

25. Next Steps
After the publication of the diagnostic report, the FSC devoted resources to:
Capacity Building
Developing a Policy Framework document
Creating an Inclusive Insurance Committee
Hosting Inclusive Insurance Events
Partnering with Micro Insurance Centre to draft a proposal for microinsurance regulations

26. Next Steps/Challenges
Rapidly evolving technology continues to impact the insurance market.
(E.g. mobile insurance)
Innovative products are being introduced
(E.g. indexed insurance)

27. Next Steps/Challenges
The new legislation must fit appropriately into the existing framework.
(E.g. Regulatory arbitrage)
Consumer protection remains a key responsibility.
(E.g. Market conduct initiatives)

28. Next Steps/Challenges
Continued capacity building
Continued collaboration with local, regional and international partners
Phased reform

29. Group Discussions
What opportunities/challenges do you foresee within your own jurisdictions?

30. Conclusion
Thank you.

31. The Jamaican diagnostic report can be found at https://a2ii