CINICO to expand health insurance coverage, add property and casualty insurance – Cayman Compass

The Cayman Islands National Insurance Company (CINICO) is planning to expand its health insurance coverage to more people and add new property and casualty insurance business lines.

Deputy Premier and Finance Minister Chris Saunders said in a press release that expanding CINICO’s health coverage would reduce costs, provide healthcare to more people and respond to the “pleas of uninsured and under-insured Caymanians and residents that have gone un-answered for far too long”.

CINICO is the government-owned health insurer for 10,200 public servants and pensioners, 1,100 seafarers and veterans, 1,800 indigents and 2,000 members of the Standard Health Insurance Contract (SHIC) plan.

The plan is for CINICO to first expand health insurance services to a wider population through developing affordable health insurance plans for younger and healthier residents, followed by a plan for retirees.

CINICO will also offer a health insurance option to public servants allowing for a choice of health care providers, which will require the establishment of a local provider network, government said.

Deputy Premier Chris Saunders

Saunders said, “At a higher level, CINICO’s expansion will address the commitment made in our Strategic Policy Statement (SPS) of ensuring an equitable, sustainable, and successful healthcare system as well as providing solutions to improve the well-being of our people so they can achieve their full potential.

“On the ground level, we are delivering on our promise to provide the public with an option that is affordable and includes a mechanism for accommodating coverage of pre-existing conditions for qualifying Caymanian retirees,” he added.

Other short-term expansion plans include providing property and casualty insurance, covering residential and auto, to public sector employees and their families.

CINICO is aiming to offer the health insurance coverage to younger and healthier residents by the end of the year, and to retirees thereafter. Property and casualty operations are anticipated to begin in the fourth quarter of 2022 or first quarter 2023.

Saunders said expanding health care coverage and adding the new lines of business would diversify CINICO’s risk profile and by extension the risk to the government.

“During the 14-year period between 2009 and 2023, core government’s healthcare costs are forecast to increase by 120% from almost $91 million in 2009 to just under $200 million in 2023,” he said. “Healthcare costs represent an average of 19% of core government’s total operating expenses, indicating that it is becoming more difficult for the public purse to sustain the increasing costs.”

Noting the withdrawal of a major insurer, Generali Worldwide, from the Cayman Islands market in December 2021, the deputy premier said expanding the national insurance company’s products would also protect residents against being left without coverage should there be any further closures in the private insurance sector.

“The withdrawal [of Generali] was a shock to the market as many individuals and businesses had to find new health insurance providers and individuals, especially those with pre-existing conditions, found it difficult to obtain affordable health insurance,” Saunders said. “To mitigate similar shocks to the Cayman market in the future, it is important that the government is in the position to be able to provide individuals and businesses with the option of affordable health, auto and property insurance.”

CINICO intends to fund the expansion with existing surplus capital. However, the public insurer will need additional capital for the planned property and casualty expansions.

On 5 April, Cabinet approved CINICO’s expansion plans and the requisite supplementary funding of $10.35 million, covering $5.35 million in 2022 and $5.0 million in 2023, under Section 12 of the Public Management and Finance Act (2020 Revision). The funds will have to be approved in the next session of Finance Committee, which is planned for May 2022.

CINICO CEO Michael Gayle noted that “Health-care costs continue to spiral, but we are confident that working with our sister organisation, Cayman Islands Health Services Authority, and with external medical providers with whom we will enter into a preferred provider network arrangement, collectively, we will be able to play a part in bringing some stability to health care costs here in Cayman.”

He added, “We also look forward to providing options to the existing slate of residential and auto insurance options.”

Saunders added, “It is past time that CINICO truly becomes a national insurance provider.”

He said the public requires more insurance options, especially for health insurance which is becoming increasingly expensive “with more and more of our retirees being excluded due to pre-existing conditions, or simply aging out at 65 from private insurance plans”.

This places an unbearable burden on retirees, which then falls onto the government.

“Expanding CINICO will both reduce these costs and provide healthcare to more of our people, while also allowing our seniors to age with health and dignity. Through such timely and prudent expansions, we hope to see CINICO eventually become the insurance provider of choice for all residents of the Cayman Islands,” Saunders said.

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