“As the global economic and financial crisis remained with us during fiscal 2013, Barbados continued to be severely affected by the issues experienced by its major trading partners. There was weak economic performance in the key export sectors together with significantly lower foreign capital inflows which constrained the prospects of economic growth in the country. As a direct result, pressure was placed on the country’s foreign reserves which necessitated significant policy adjustment as noted by the Central Bank of Barbados. This adjustment was described as fiscal consolidation and was reflected in increased taxation and expenditure controls. The domestic insurance market responded to the current economic environment with competitors seeking to gain market share with aggressive marketing and pricing strategies.

The Barbados economy continues to be confronted by the challenges of the global economic recession and contracted by 0.2% in 2013. There were declines in key industries, with tourism and construction contracting by 1% and 12% respectively. The inflation rate fell to 2% by October 2013 from 6.5% in 2012, while the unemployment rate averaged 11.2% for the first nine months of 2013. Decline in reserves from May 2013 onwards required fiscal contraction measures outlined by an 18-month fiscal adjustment package in August 2013, which includes job cuts equivalent to about 11% of the public sector workforce or 3,000 employees.”

Ingrid Innes
Managing Director & Chief Executive Officer
The Insurance Corporation of Barbados Limited