Jamaica’s insurance industry is preparing fresh proposals for the Government aimed at boosting weak uptake of life insurance, health cover and pensions, as stakeholders warn that too many Jamaicans remain financially exposed to illness, disaster and retirement risks.

Among the ideas now under discussion are tax incentives for insurance products, health savings-style accounts and renewed calls for automatic pension enrolment, as industry players argue that too many Jamaicans remain financially exposed when illness, disaster or retirement arrives.

The proposals were outlined this week by JN Life General Manager Hugh Reid at the Insurance Association of Jamaica’s (IAJ) 2026 conference at the Jamaica Pegasus Hotel.

Reid told the Jamaica Observer following the panel discussion in which he participated, titled ‘Lessons from Hurricane Melissa: What a National Shock Revealed About Insurance Resilience’, that low insurance penetration remains one of the country’s biggest unresolved financial risks.

“The major concern that Minister Samuda made reference to, that Stephen Whittingham made reference to, is that in terms of insurance penetration, we in Jamaica, we are doing very poorly. That is life insurance, health insurance, general insurance and pension. The vast majority of Jamaicans have neither or none of those,” Reid said.

“We are a poor country and it’s going to be very, very difficult to increase insurance penetration if we do not incentivise long-term savings. There was a time when I graduated, the first thing anyone who graduated, whether from school or from university, would do is buy an insurance policy. Why? Because there was a tax incentive,” he continued.

For years, the industry has leaned heavily on financial education and awareness drives. Reid’s remarks suggest it now wants a more direct policy response. He argued that many households are not rejecting insurance outright, but are forced to prioritise immediate expenses over future protection.

“Insurance is the deferral of current consumption. People have school fees, other bills to pay, so when they assess the priorities, they say, well, the future will take care of itself,” he said.

As such, the latest proposals are centred on incentives designed to make saving and insurance more attractive now, rather than only beneficial later.

“What we have to do is provide an incentive so that persons will say, OK, while it is in the future, there is an incentive that I’m getting to save, whether it is to save in a health savings account that I can then draw on for my health expenses, whether it is as a tax credit, so that I can buy an insurance policy and therefore provide for my children or provide for critical illnesses,” Reid said.

During the panel, moderator Everton McFarlane, who also serves as executive director of the Insurance Association of Jamaica, challenged Reid on how new tax incentives could realistically be advanced at a time when the Government remains under pressure to protect revenues.

Reid’s response was that fiscal constraints are too often used to delay reforms that could strengthen long-term savings and ultimately support growth.

“Our fiscal situation is often used as an excuse when certain things need to get done. The president of the IAJ made reference to the fact of the asset tax. And the asset tax was brought in as a temporary measure. … there is always a reason why it has to continue. But I think it’s important from an economic perspective, for us to look at where we want to go and how we need to get there,” he reasoned.

The wider point Reid appeared to be making was that policy discussions should not focus only on what new incentives the Government can afford to grant, but also on whether existing taxes are holding back the very sectors being asked to mobilise savings, expand protection and finance development.

“The truth is that some people might say that, well, where is the money coming from to give all of these incentives? But when you provide these incentives, you get a return. And the return is more persons are paying premiums, more persons are saving for the future,” he said.

Meanwhile, the broader reform push also brings renewed attention to pensions, where Jamaica has spent years modernising regulation but has yet to achieve wide participation.

At June 2025, pension assets stood at $829.23 billion, up from $779.9 billion a year earlier, according to Financial Services Commission data. Yet active pension membership represented just over 12 per cent of the employed labour force.

Automatic pension enrolment, while discussed for years, remains one of the options the industry wants back on the policy agenda. Reid said the proposal remains straightforward in concept.

“The proposal would be automatic enrollment. The requirement is that when you start working, whether you’re working for yourself or with a company, it would be a requirement that you enrol in a formal pension scheme or pension fund,” Reid said.

“There would be provisions, for example, for persons to opt out. But the research has shown that once you enroll people in certain things, it takes effort for them to come out, and therefore you’re going to automatically find more persons.”

Reid told the Business Observer that the IAJ is now preparing formal proposals, particularly around the new incentives for the Government and regulators, with discussions expected before year-end.

“We are developing a plan to discuss with the government and the regulators about how we can deepen insurance penetration, because insurance penetration is required to enable persons to become more resilient and also to enable consumers to be in a better position,” he said.