Insurance firms told to avoid risks

Insurance companies have been urged to mitigate risks so as not to weaken the economy, and to adapt their strategies to government policy aiming a safe and sound management of the insurance sector. 

Chief Guest at the annual meeting of the Insurers’ Association of Mauritius yesterday, Minister of Finance and Economic Development Pravind Jugnauth appealed to insurance companies to be “very cautious” when handling financial instruments with high risks. 

He said warned expectations of higher yields on investments and higher returns are also accompanied by higher risks that insurers must not disregard. 

“Ultimately, we know we cannot have a riskfree business environment. But what we can have and should do is to enhance our skills at understanding and mitigating risks at the micro level,” he said, adding that it is there that the insurance sector will have a key role to play. 


The finance minister pointed out that the insurance sector has two major functions to carry out in the economic landscape – to spread the risks more thinly in the economy to allow other businesses to grow, and to advise enterprises on how to manage both existing and future risks. 

Mr Jugnauth also said that Mauritius has been fortunate so far through both the global recession and the Eurozone crisis, but he pointed out that these global negative events are occurring more frequently than ever before. 

“We now have to deal with the impact of the upheavals in some North African countries and the region, the ripples from the catastrophe in Japan, and another spurt of oil and food price increases,” he said. 

The resilience of the country’s economy cannot come only from macroeconomic policies. “Managing risks at the micro level will be crucial to protecting our economy and to enhancing its competitiveness,” he said. 

Mr Srinivasan Vaideswaran, President of the Insurer’s Association of Mauritius and Chief Executive of The New India Assurance Co. Ltd here, said the association is aware of the need for greater transparency on insurance practice and procedures and is working on a common customer charter for its member. 

“The charter will notably address matters such as access to service, protection of privacy, processing and settlement of claims, dispute resolution, commitment to quality and openness to customer feedback,” he said.

By Clifford Vellien