Guyana’s insurance industry is one that is ripe for upgrades, with Vice President Bharrat Jagdeo acknowledging that there is much that needs improving in the insurance industry such as better compensation for drivers who get into accidents… improvements that are becoming ever more necessary as Guyana’s economy continues to grow.
During his recent press conference, Jagdeo noted that the Government is open to exploring ways of improving the insurance landscape and further, insurance sector legislation is likely in the future. He compared the insurance sector to the financial one, noting that while it has grown significantly, there is still much room for improvement.
“So too with the insurance sector, that has to be upgraded significantly. So, the depth of the insurance industry in Guyana, like with our banking system. They’re still too shallow. The financial sector has grown significantly, but when you look at its asset base, it cannot service a $20 billion economy, in a manner that would be permissive of its rapid growth. They don’t have the assets and instruments. Because many of the instruments are dated and not modern enough.”
“For example, vehicles, if you get into an accident now, the compensation is very small. But if we raise the compensation level, they would raise premiums for every person. So sometimes these things have unintended consequences. But you do have to explore them as the economy gets larger. But you have to pace yourself,” Jagdeo said.
The vice president also noted that changes to the laws governing insurance would be part and parcel of the Government’s efforts to improve the fiscal space and create a more enabling environment… something the People’s Progressive Party/Civic (PPP/C) Government has already made progress in.
“All of the changes that are being made to create a more enabling environment, that often slip past many people, they don’t notice the changes but they are very profound. So, if you look, for example, at the condominium Act. That act in itself would allow a massive growth of what is already happening. People building condos for sale.”
“And these are all opportunities that grew out of the local content law, when we prohibited the oil and gas companies from renting from foreigners. So just that example. Then, for example, the data privacy act, how that could help with developing a whole range of services that are needed in the country, but where they have to be regulated for privacy purposes and protection of the citizens,” the Vice President said.
Jagdeo also recalled the Government’s tabling of the Security Interests in Movable Property Bill 2024 last month. This bill had introduced a national registry to record security interests, in order to allow banks and other creditors to verify whether the movable asset being offered had been previously pledged as collateral.
“So, people can get loans now, on something that is moveable. A vehicle for example. They can use it to collateralise a loan. They can maybe take small loans out of the vehicles, etc. In the past, the banks would insist on fixed assets. So, its that sort of growth that will happen in the future,” Jagdeo added.
The private sector has been vocal about the need for access to finance to be addressed, at one point calling out continued bureaucracy at commercial banks hindering access to financing. The PPP/C has also consistently urged the banking industry to be more proactive.
As a matter of fact, one of the strategies being pursued by the Government to address access to finance, which has been a long-standing challenge in Guyana for entrepreneurs, includes efforts to attract a large, international bank to Guyana’s shores.
During the recent Guyana Manufacturing and Services Association (GMSA) 29th Annual Awards and Dinner, Jagdeo had in fact assured that the Government is actively exploring the re-establishment of a development bank in Guyana.
