The Government of Saint Lucia officially launched a National Insurance Dialogue as part of a national consultation on the current state of the insurance market and its implications for citizens, businesses and the wider economy.
The consultation comes against the backdrop of rising insurance premiums, shrinking coverage and increasing exposure to climate, fiscal and social risks. Stakeholders from government, the insurance sector and regulatory bodies, convened to assess structural challenges within the market and identify long-term solutions.
During the recent launch at the Hewanorra House in Castries, chairman of the Life and Health Subcommittee, Joseph Dolor, delivered an assessment of the sector, and warned that the pressures facing the insurance market are deep-rooted.
“Let me be direct. St Lucia’s insurance market is under structural pressure,” he said, cautioning that “without coordinated intervention, coverage will continue to shrink” and that “premiums will continue to rise.”
Joseph Dolor. (Photo credit: Josiah St. Luce)
Dolor emphasised that premium increases are not arbitrary and are not driven solely by local insurers. He explained that global reinsurance pressures are a major factor, noting that “global reinsurers are aggressively repricing catastrophic risk,” with rate increases of “15 to 30 per cent,” reduced capacity, leading to stricter underwriting terms now for small, high-exposure territories such as Saint Lucia. He stressed that “these costs are not absorbed locally” but are passed directly to consumers.
He also highlighted Saint Lucia’s concentrated exposure to natural hazards, including hurricanes, landslides and increasing climate volatility, stating that “from a risk pricing standpoint, this construction makes the market inherently more expensive to insure.”
Motor insurance was identified as another major driver of rising premiums as Dolor pointed to increases in both the frequency and severity of motor vehicle claims, explaining that “motor insurance premiums are fundamentally driven by claimed outcomes.” He added that when accidents become more frequent and severe, “premiums must be adjusted if insurers are to remain solvent and be able to pay claims.”
He revealed that additional pressures within the system included inflation, volatile rebuilding costs, high deductibles, long settlement periods and the five per cent insurance premium tax, particularly for low and middle-income households. Dolor stressed that “these are not temporary shocks,” but “structural market realities.”
As a result, insurance penetration remains critically low in Saint Lucia, with industry estimates suggesting that around 80 per cent of residential properties on the island lack property insurance coverage.
Dolor noted that low uptake is not driven by price alone, but also by affordability constraints, mistrust or misunderstanding of insurance products, and limited education.
He warned that when insurance becomes optional, “risk doesn’t disappear,” but instead “shifts from the private sector onto families and onto government.”
He underscored the broader economic implications, stating that “insurance is economic infrastructure.” In an uninsured economy, he warned, recovery slows, credit markets tighten and fiscal pressure on the state increases.
While property insurance often dominates public discussion, Dolor described life and health insurance as “silent stabilisers.” He explained that life insurance “protects household income streams,” helps keep mortgages current and prevents death and disabilities from becoming generational poverty,” while health insurance reduces catastrophic out-of-pocket spending and downstream fiscal pressure on the state.
Dolor noted that the government already recognises the importance of insurance through existing tax incentives, including deductions for life insurance, medical insurance and homeowner property insurance premiums. However, he acknowledged that “despite this, insurance penetration remains dangerously low,” particularly among low and middle-income households.
He said the national consultation provides an opportunity to reassess how existing incentives operate, including whether they effectively reach first-time and previously uninsured householders and how incentives can be better aligned with resilience and risk-reduction measures.
“This is not about introducing new subsidies, but about optimizing existing policy tools,” Dolor said.
Sophia Alfay-Henry. (Photo credit: Josiah St. Luce)
Permanent secretary in the Department of Commerce, Sophia Alfay-Henry, described the consultation as addressing “an issue of national importance.”
She said the Department of Commerce “remains steadfast in its commitment to facilitate and support the business community” and stressed that the forum demonstrates that stakeholders’ concerns are taken seriously.
Alfay-Henry explained that the consultation extends beyond premium costs to examine public attitudes, regulatory frameworks, fiscal policy, market dynamics and the role of government in building a more inclusive and resilient insurance ecosystem.
