Key Insights on General Insurance from the 2024 Financial Stability Report

The 2024 Financial Stability Report highlights both the progress and the challenges faced by Barbados’ general insurance sector. While the industry remains resilient, it continues to navigate a shifting landscape shaped by global and regional developments.

Profitability Under Pressure

In 2024, general insurers saw slower growth in premiums and lower investment returns. Gross premiums written rose by 5.9%, slightly down from 6.4% in 2023. Return on assets remained low at 0.5%, reflecting the ongoing difficulty in balancing underwriting results with investment income.

Smaller insurers were hit hardest by these pressures, but many benefit from being part of larger regional financial groups, which allows them to access additional funding if needed.

Global and Regional Headwinds

Geopolitical tensions, shifting trade policies, and changing tariffs are expected to slow premium growth in 2025. These factors, along with modest imported inflation, could make it harder for insurers to expand into regional markets.

Climate risk continues to be a growing concern. While loss ratios improved slightly in 2024, events like Hurricane Beryl remind us how quickly severe weather can impact both communities and insurers.

Rising Reinsurance Costs

Reinsurance remains essential for protecting against catastrophic losses, but it is becoming more expensive. In 2024, over 54% of general insurance business was ceded to reinsurers. As climate-related events grow in frequency and severity, these costs are expected to rise, which could impact the affordability and availability of coverage for households and businesses.

Building Resilience

To prepare for uncertainty, insurers are shifting towards safer investments such as government securities and cash deposits, while reducing exposure to riskier assets. This defensive approach helps protect against market shocks but may also limit investment returns if interest rates remain low.

The sector is also exploring adaptive underwriting and policy frameworks to better absorb climate-driven losses and close protection gaps in coverage.

Read the full 2024 Financial Stability Report for a deeper look at the state of Barbados’ financial sector: Click here or scan the QR code on our social media posts.
 

At a Glance: General Insurance in 2024

• Growth slowed: Premiums rose by 5.9%, down from 6.4% in 2023.
• Profits under strain: Lower investment and underwriting income kept returns low (0.5% ROA).
• Smaller insurers felt the squeeze but many have backing from larger parent companies.
• Global pressures: Trade tensions and changing tariffs may slow growth in 2025.
• Climate risk rising: Hurricane Beryl caused major damage despite avoiding direct landfall.
• Reinsurance costs climbing: Over 54% of business ceded to reinsurers; higher costs could mean pricier or reduced coverage.
• Stronger safety nets: Insurers are moving to safer investments and boosting liquidity buffers.