THERE is need for government to partner with insurance companies to ensure that there are sufficient securities for investment, and attractive profiles to develop Guyana.This is the position taken by Prime Minister Moses Nagamootoo during his feature address at an event at the Marriott Hotel Saturday evening to mark the 150th Anniversary of the Hand-in-Hand Group of Companies.

According to the Prime Minister, Guyana has embarked on the regulatory strengthening of the insurance sectors, since insurance and pensions protect the poor against vulnerability and livelihood risks, allowing for an increase in income and consumption and an accumulation of assets.

Nagamootoo said government has recognised the important role the insurance industry has to play in the transformation of Guyana’s economy. In that light, the debacle of Colonial Life Insurance Company Limited (CLICO) can bring about the loss of confidence in the local insurance industry, which is a peril to the industry and citizens.
AFTER CLICO

CLICO collapsed in January 2009, following the global financial crisis in 2008. The global recession exposed the company’s inability to meet its commitments to pay maturing investments at CLICO and CLICO Investment Bank (CIB).

“Together, government and financial institutions must guard against this occurring again by putting measures in place to ensure that the industry is supervised and regulated in the most efficient manner. And so the insurance industry is now under the purview of the Central Bank, and the new insurance Act has recently been drafted to repeal the Insurance Act of 1998 under which insurance companies operate,” the Prime Minister explained. “This is to bring insurance companies in line with international best practices, and meet the country’s specific needs.”

Noting that the company plans to expand into the banking sector, Nagamootoo said: “I commend the company for its immense contribution to the local insurance industry and the company should be proud of its achievement over the past 150 years. In order to differentiate yourself from your competitors, you need to be in the forefront of innovation, creating new products that can resonate with a discerning and skeptical public.”

He said the company must look for profitable investments that will accelerate growth and development in Guyana.

“I rejoice with you, because not only have you helped Guyanese to mitigate the impact of grief, losses and injuries, but because the insurance industry of which you’re a pioneer has contributed to economic and financial development in Guyana,” the Prime Minister said.
“The company has gone through a remarkable transformation from its humble beginnings and to become a major player in the insurance industry in Guyana today.”
ESSENTIAL SERVICES
He said insurance services are essential to the economic development, social development and stability of any economy by reducing uncertainty and by making the economic cycle smoother.

Additionally, the Prime Minister said that as part of the financial system, customers are allowed the choice to diversify their portfolio by investing in alternative financial instruments.

“Since Hand in Hand commenced operation in Guyana the insurance companies have expanded and evolved. The industry and its benefits of having insurance have become better understood and the industry is now well received by the public,” he explained.

Meanwhile, Chairman the of Hand in Hand Group, John G. Carpenter said the company, as the largest Trust institution in Guyana, has a long and proud history of local service.

Underscoring its genesis at a critical point and time in Guyana, Carpenter said in 1864 when Georgetown was a rapidly expanding wooden city with thousands of buildings in close proximity, the fear of fire was always present.
He explained that the fear was realised after in the same year there were two disastrous fires which crippled the commercial area of Georgetown with losses that would amount to one billion dollars in today’s value.
At that time the insurance for the city was controlled by expatriate companies, Carpenter observed.He said the companies had decided after those fires to increase their rates from 4 per cent to 6 per cent of the sum insured. “This was extremely difficult for the already locally suffering businesses to deal with those sort of premiums.”

In October 1865, he said a group of local businessmen launched the Hand In Hand Mutual Fire Insurance Company Ltd.
INDIGENOUS ENTERPRISE
“This company was probably one of the first examples in Guyana of an indigenous enterprise venturing into an arena that was previously controlled by expatriates.”
In August 10, 1878, he said the foundation stone was laid and the Hand in Hand building stands now next to the Bank of Guyana.

“Even in 2015 that is a classic building, it appears modern even in today’s standards which has enhanced the city of Georgetown for all those years.” He declared, “I would like to emphasise our pride in what Hand in Hand has achieved in 150 years. During that time we have served our policyholders efficiently and in full recognition of the importance of what we represent in the lives of the ordinary people.”
POSTAGE STAMPS
To also commemorate the anniversary, the Guyana Post Office Corporation (GPOC), in collaboration with the Hand-in-Hand Group of Companies, released four new locally-themed postage stamps earlier this month to observe the insurance institution’s 150th Anniversary.
Stamps will be available for circulation in $80 and $150 denominations at selected post offices.

The Hand-in-Hand Group of Companies was established in 1865 and began its operations at the current and today the company operates 14 offices countrywide.
By Rabindra Rooplall