2019 was a challenging year for Trinidad and Tobago with GDP declining 1.2%, mirroring a decline in oil production of 7.3%, despite the start of operations and Heritage. Gas production, however, increased by 2.6%.
The Energy Commodity Price Index, which is an indicator of the average prices of T&T’s energy exports, declined by 4.8% y-o-y from the end of 2018 to 2019.
Other sectors showed decline. Notably, new car sales which impacts the motor line of the general insurance segment fell by 2.9%. The general insurance segment would have also been negatively impacted by further declines in the US dollar exchange rate and in continued shortages of US dollars impacting their reinsurance programmes.
On the other hand, positive developments were seen in the stock market where the TTSE index grew by 9.5% (compared to 2.9% in 2018); and the yield on Trinidad and Tobago bonds showed a slight increase from 5.6% to 5.9%. Whilst these developments would have a positive impact on the investment returns of the long term insurance segment, the impact is not significant. Sustained low investment returns continues to impact this segment as well as the lack of access to suitable investment instruments to meet asset-liability matching.
In July 2019, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit rating on Trinidad and Tobago to BBB from BBB+ and moved it from negative to stable outlook.
It is reassuring that against the backdrop of a decline in GDP, gross written premiums increased across all segments