Cedric Stephens The trust, longevity, climate change and small-farmer link
The Rev Ronald Thwaites’ October 24 essay, ‘Can Good Come from this Nazareth?’, featured the GraceKennedy Foundation’s 40th Anniversary Lecture and its sponsor’s centenary celebrations.
His comments about the lecture and the GraceKennedy Group spurred me to view the event on YouTube. The 2.5 hours that I devoted were well spent. The GK Group has a keen understanding of risks. Also, it owns and operates companies in the local and regional life and non-life insurance sectors and is involved in the process of pursuing lofty global ambitions.
Trust – which Rev Thwaites wrote, is “the scarcest, but most necessary of personal, (corporate), and civic virtues … is the assurance that any relationship is based on truth and principle rather than opportunism and self-interest” – is implied in the group’s motto, ‘we care’. The Inter-American Development Bank’s 2002 book opened my eyes to the scale of the distrust that exists in Latin America and the Caribbean. The lack of trust was the subject of two of my articles earlier this year. I also learned from a Gleaner July 17, 2017, article that a poll by Bill Johnson found that “Jamaicans have strong distrust in most social agents”.
The longevity of GraceKennedy is partly due to the owners’ and senior managers’ recognition and understanding of the important role that trust plays in human interactions and business.
The Jamaica Observer’s November 2 story ‘Rich and Wily: New Watchdog Agency Suggested for Fat-Cat Insurance Companies’, indicates that some insurance companies transact business on principles other than on the utmost good faith but on opportunism and self-interest. It is worrying that neither the State nor the insurance regulatory body, the Financial Services Commission, appears to have recognised this or has taken any steps to remedy the situation despite the mounting evidence and the harms to the financial-inclusion strategy.
An allusion is a figure of speech in which an object or circumstance from an unrelated context is referred to covertly or indirectly. It is left to the audience, or the reader, to make a direct connection.
The clue to understanding Rev Thwaites’ biblical allusion can be found by substituting Jamaica for the words ‘this Nazareth’. The GraceKennedy experience over 100 years, he argues, offers compelling evidence about the importance of trust in society. His article concludes with the following questions: “Are our national leaders and institutions worthy of trust? Do we (as citizens) cultivate trustworthiness as a supreme civic virtue so that good can come forth from this Nazareth?”
Insurance company leaders, especially, should pay attention if they want their organisations to survive the 21-year average lifespan of a company on the Standard and Poor’s 500 Index and move into the 100-year group that reportedly amounts to 0.5 per cent.
TAKE ACTION
The second part of today’s article was influenced by the actions of a 187-year-old US insurance company, Factory Mutual. It is one of the world’s largest commercial and industrial property insurers. Last week, it opened in Singapore’s Science Park its first “client-centred experiential risk-management facility'” in the Asia-Pacific. The CEO said the facility embodies “how businesses can take action to realise the business value of risk improvement and increased resilience. With the opportunity for first-hand experience in the science of risk management, companies will be empowered to elevate conversations about risk improvement and can more effectively address the challenges of increasing climate risk as well as growth and infrastructure challenges in the region”.
Regular readers of this column know that I have long advocated that insurers and intermediaries should extend their operations beyond selling policies. They should provide information and advice about managing risks. This would be one way to create more customer value and help bridge the trust-deficit gap.
A few years ago, a Barbadian insurer offered expert advice about how to reduce storm-triggered roof damage. That development plus the threat of more and stronger climate change-induced hurricanes has not encouraged any Jamaican-based insurer to follow that example.
I do not see any signs that the technocrats in the Ministry of Agriculture and Fisheries and/or our insurers – who have long ignored the country’s agricultural sector but are now talking about inclusive insurance – are studying the lessons learned by Puerto Rican small farmers during successive hurricanes in recent years to see if they can be applied locally.
PROACTIVE
This would be a proactive and appropriate response to some of the risks posed by climate change and consistent with the ministry’s ‘grow smart, eat smart’ campaign and its motto that food security is everyone’s business.
The New York Times recently reported that after years of destructive weather disrupted Puerto Rico’s food supplies, new visions of agriculture are taking root. Some of the inputs for the products that are sold by Grace Foods and other big distributors in the local and overseas markets are grown by Jamaican small farmers. Increasing the resilience of their crops to climate change must be part of the national agenda.
In the meantime, according to a Reuters report last Wednesday, a group of over 85 insurers in Africa pledged during the COP27 UN climate talks in Egypt to create a financing facility to provide US$14 billion of cover to help the continent’s most vulnerable communities deal with climate disaster risks such as floods and droughts.
On the other hand, some foreign reinsurers are scaling back on the capacity offered to Caribbean insurance companies. Jackass seh de world nuh level!
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com