Go Lean Commentary
Continuity of Business (CoB) …
It’s a simple concept; it asserts that if there are any extraordinary events – i.e. emergencies and natural disasters – that the tools and techniques are in place to pick-up and continue for business-as-usual. For some companies, this field is so formalized that they have stakeholders (team) with the responsibilities to ensure that “no stone is left un-turned”. These companies have a C-level executive with this responsibility, i.e. …
- VP of Risk [Management]
- Director of Disaster Recovery
One popular risk mitigation strategy is to buy “insurance“. Yet the Caribbean is in crisis! Due to Climate Change realities, there are fewer and fewer “Property & Casualty” insurance products available to Caribbean stakeholders.
This is Sad!
Yes, it is that simple: insurance is a protection to ensure the continuation of business operations, and is expected for all modern business operations. This theme was addressed in a previous blog-commentary by the movement behind the book Go Lean…Caribbean, in relation to the need to ensure the continuation of a community in the wake of Caribbean natural disasters. That submission presents this quotation:
… an insurance strategy could be even smarter for rainy days or catastrophes; it allows the hedging of risks by leveraging across a wider pool; more people – savers – put-in and only a few … or just one withdraws. This is also the approach of the thoughtful Caribbean Catastrophe Risk Insurance Fund (CCRIF).
It is very sad when communities are not able to save or insure a “Rainy Day” fund for when it rains, especially in the tropical region where it doesn’t just rain, but pours and storms.
What is sadder is when the heavy-lifting of “savings” or insurance is done, but the dollar amount is not enough; because a “penny saved is only just a penny”.
The Caribbean’s industrial landscape is in crisis. It must reboot; we do not have adequate “Property & Casualty” offerings. The identified CCRIF Catastrophe Fund, though it’s too-little-too-late, is for member-states governments, by the member-states governments. Individuals and companies need not apply; yet still, there is the need. Individuals, institutions and enterprises need the protection of a viable CoB solution. This glaring need is so obvious, right now on the heels of Tropical Storm Kirk. Though not a major storm, it brought major destruction to one particular business. See the full story here:
Title: Poultry farmer loses 2000 chickens during storm
Poultry farmer Linus Bernadine suffered a major setback Thursday night, when high winds associated with Tropical Storm Kirk destroyed his chicken houses at Babonneau.
Bernadine told St Lucia Times it resulted in the loss of 2000 broiler chicks.
He explained that the loss has impacted significantly on his livelihood.
“This is what I am expecting to put bread on my table,” Bernadine stated.
He estimated that his losses are in the region of some $90,000.
Bernadine said he does not know how he will recover from the calamity.
“Right now I am just on the farm demolishing things,” he said.
“What happened is that these birds, I just got them on Wednesday last week and the storm was Thursday night,” Bernadine disclosed.
The poultry farmer recalled having left his home for Vieux Fort to pick up the chicks.
“I got back home about ten past nine in the night, I put the birds down and that was it,” he stated.
“Friday morning I had no choice but to bury them,” he told St Lucia Times, adding that both of the chicken pens on his property had been destroyed by the storm and the chicks that were in them died.
“I am flat down – everything is just gone,” Bernadine lamented.
“I have a capacity of about 7000 birds and all of that is flat down,” he said.
Source: St Lucia Times Daily Newspaper – Posted September 30th, 2018; retrieved October 2, 2018 from: https://stluciatimes.com/2018/09/30/poultry-farmer-loses-2000-chickens-during-storm/
Needless to say, the underlying problem in the foregoing story is “money”, the lack of money in Caribbean communities for restoring business operations in the wake of disasters.
The lack of money is the root of all evil” – Pejorative Pun credited to “Rev. Ike”
There is not enough money in the St. Lucia pool. The Go Lean book simply declares that there needs to be a Bigger pool, one that individuals, institutions and enterprises can participate in. The Go Lean book proposed the solution of Reinsurance Sidecars, related in the book on Page 101 as follows:
Hurricane Insurance Fund
The risk pool for a 42-million population is so much lower than each member-state’s sole mitigation efforts. The CU will establish (contract with a service provider) reinsurance funds (& sidecars) from Day One, and glean the excess premiums-over-claims as profit.
So this is the solution that is proposed in the Go Lean book, to allow for Reinsurance Sidecars in the regional Capital Markets. This way more liquidity will be brought to the marketplace and investors can share in the risk … and profit. See a fuller definition of Sidecars here:
Reinsurance Sidecars, conventionally referred to as “sidecars”, are financial structures that are created to allow investors to take on the risk and return of a group of insurance policies (a “book of business”) written by an insurer or reinsurer (henceforth re/insurer) and earn the risk and return that arises from that business. A re/insurer will only pay (“cede”) the premiums associated with a book of business to such an entity if the investors place sufficient funds in the vehicle to ensure that it can meet claims if they arise. Typically, the liability of investors is limited to these funds. These structures have become quite prominent in the aftermath of Hurricane Katrina as a vehicle for re/insurers to add risk-bearing capacity, and for investors to participate in the potential profits resulting from sharp price increases in re/insurance over the four quarters following Katrina. An earlier and smaller generation of sidecars were created after 9/11 for the same purpose. …
Source: Retrieved October 13, 2017 from: https://en.wikipedia.org/wiki/Reinsurance_sidecar
The introduction of Reinsurance Sidecars will reboot the entire industrial landscape in the Caribbean. With this product, businesses will have the Property & Casualty insurance products to provide some assurances; also banks will be able to compel their loan clients to maintain these coverages. This is the whole definition of “Escrows”, that of banks requiring Property & Casualty insurance for their loan customers:
In layman’s terms, this means an escrow service is basically a middleman between a buyer and a seller, or in the case of a mortgage, a middleman between a homeowner and the county (for property taxes), insurance companies, and anyone else who the homeowner designates to pay with funds from the escrow account.
1. Imagine the effect of sidecars on bank escrow processing departments.
2. Imagine the effect of sidecars on the insurance retail and wholesale markets.
3. Imagine the effect of business insurance on businesses.
4. Imagine the effect of business continuity on community continuity.
5. Imagine the effect of an industrial reboot on Caribbean life and our day-to-day reality.
So the goal here is to better explore the industrialization of Reinsurance Sidecar products and escrow processing. We must pursue this reboot of our industrial landscape; we need to foster the many new opportunities (jobs, entrepreneurism and industrial development). This is the declaration of the book Go Lean…Caribbean – available to download for free; it serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU); this is a confederation of all 30 member-states – the larger pool – to execute a reboot of the Caribbean economic eco-system. This CU/Go Lean roadmap has these 3 prime directives:
- Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
- Establishment of a Homeland Security and Emergency Management apparatus to ensure public safety and protect the resultant economic engines.
- Improvement of Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.
The Go Lean book stresses that reforming and transforming the Caribbean economic engines must be a regional pursuit – always remember the reality of a larger pool. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 11 – 13):
i. Whereas the earth’s climate has undeniably changed resulting in more severe tropical weather storms, it is necessary to prepare to insure the safety and security of life, property and systems of commerce in our geographical region. As nature recognizes no borders in the target of its destruction, we also must set aside border considerations in the preparation and response to these weather challenges.
xvi. Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes … can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.
xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.
xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries… . In addition, the Federation must invigorate the enterprises related to existing industries … – impacting the region with more jobs.
This is the vision of an industrial reboot! This transformation is where and how the economic eco-system is reinforced, re-engaged and re-engineered. With this reboot in the Caribbean, new jobs can be created, companies started and industries optimized.
Despite the references to “industrial”, there are benefits to individuals as well.
Mortgages and houses will have protections, this means the Caribbean home will be more secure. This fits the quest of the Go Lean movement, to make the Caribbean a better homeland to live, work and play.
The foregoing news article related the agri-business of a Chicken Farm. Have you eaten chicken lately?
Probably! For some people it’s everyday!
So the out-workings of this industrial reboot will also have an effect on consumer goods. That’s food and shelter, part of the pantheon of basic needs: food, clothing and shelter.
The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society. One advocacy in rebooting the industrial landscape is to work to improve the delivery systems for our food supply. All Caribbean islands and coastal states should have chicken farms. It is unconscionable that ALL CHICKENS may be imported from abroad. Surely, we can provide the industrial landscape so that every community have their own chicken farms.
Surely …
This will mean that we will have to manage and mitigate the risks of storms and natural disasters; remember Climate Change.
Consider these specific excerpts and headlines from the book on Page 162 entitled:
10 Ways to Better Manage Food Consumption
| 1 | Lean-in for the Caribbean Single Market The CU will allow for the unification of the region into one market, thereby creating a single economy of 30 member-states, 42 million people and a GDP of over $800 Billion – the CU will take the lead in facilitating the food supply and distribution systems to ensure the region can feed itself, more from local production and less from trade. Though the cost savings of imports should never be ignored, some CU countries (Greater Antilles, Belize, Guyana & Suriname) have a low opportunity cost for increasing food production for the regional market. Thus a mission of the CU is to streamline the systems, processes, logistics, funding, training, and market promotions so that the Caribbean can fulfill this basic need. |
| 2 | Public Health Dynamics – Produce Deserts & Farmers Market |
| 3 | “Nouvelle” Caribbean Cuisine |
| 4 | Agri-Business Many of the member-states get 90% (or more) of their food supplies from imports; even fish is imported from Alaska, despite the 1,063,000 square miles of harvestable waters of the Caribbean Sea. The CU will implement agri-business (and aqua-culture) investments to generate more regional options for food production: cooperatives (co-ops), farm credit, common grazing lands, fisheries oversight, canaries, aqua-culture endeavors, etc. |
| 5 | Logistics for the Food Supply |
| 6 | Fresh Frozen |
| 7 | Food Labeling |
| 8 | Export – Help Regional Businesses Find Foreign Markets |
| 9 | Media Industrial Complex |
| 10 | Food Tourism |
Rebooting the industrial landscape of the Caribbean is not a new subject for this Go Lean roadmap. In fact, this commentary has previously identified a number of different industries that can be rebooted under this roadmap. See the list of previous submissions on Industrial Reboots here:
- Industrial Reboots – Ferries 101 – Published June 27, 2017
- Industrial Reboots – Prisons 101 – Published October 4, 2017
- Industrial Reboots – Pipeline 101 – Published October 5, 2017
- Industrial Reboots – Frozen Foods 101 – Published October 6, 2017
- Industrial Reboots – Call Centers 101 – Published July 2, 2018
- Industrial Reboots – Prefab Housing 101 – Published July 14, 2018
- Industrial Reboots – Trauma 101 – Published July 18, 2018
- Industrial Reboots – Auto-making 101 – Published – July 19, 2018
- Industrial Reboots – Shipbuilding 101 – Published – July 20, 2018
- Industrial Reboots – Fisheries 101 – Published – July 23, 2018
- Industrial Reboots – Lottery 101 – Published – July 24, 2018
- Industrial Reboots – Culture 101 – Published – July 25, 2018
- Industrial Reboots – Tourism 2.0 – Published – July 27, 2018
- Industrial Reboots – Cruise Tourism 2.0 – Published – July 27, 2018
- Industrial Reboots – Reinsurance Sidecars 101 – Published Today – October 2, 2018
Reinsurance Sidecars – remember the name. While these, and other derivative products, are not commonly known in the Caribbean today, they will be. They are too important for our future.
Don’t ever forget, as this fact often gets overlooked, they are also vastly profitable investment products. See the VIDEO‘s in the Appendices for more details on Reinsurance Sidecar derivatives as investment products.
In summary, our Caribbean region needs a better industrial landscape so as to make our homeland better. In fact, one of the reasons why so many Caribbean citizens have emigrated away from the homeland is the lack of the ability to quickly recover after natural disasters. This is why Homeland Security – preparation and response of emergencies – is coupled with economic policies for rebooting the societal engines in the region. So creating a new economic landscape will require rebooting the industrial landscape.
So as an enterprise, an institution or an individual, we need good insurance options – a Continuity of Business. A bigger-better regional risk pool is paramount for a better Caribbean. This is how we can make our region a better homeland to live, work and play. We urge all Caribbean stakeholders to lean-in to this roadmap for industrial reboots, security enhancements and economic empowerments. 🙂
Download the free e-Book of Go Lean … Caribbean – now!
Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.
————-
Appendix A VIDEO – What is REINSURANCE? What does REINSURANCE mean? REINSURANCE meaning, definition & explanation – https://youtu.be/7Qe4-Ei2PHY
Published on May 17, 2017 – What is REINSURANCE? What doe REINSURANCE mean? REINSURANCE meaning – REINSURANCE pronunciation – REINSURANCE definition – REINSURANCE explanation – How to pronounce REINSURANCE?
Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/… license.
- Category: Education
- License: Creative Commons Attribution license (reuse allowed)
————-
Appendix B VIDEO – What Is Financial Reinsurance? – https://youtu.be/W45REh7Pt7I
Published on May 25, 2015 – What Is Financial Reinsurance?. Part of the series: Small Business Tips. Financial reinsurance is a key component to any successful business. Learn about financial reinsurance with help from a business consultant and marketing expert in this free video clip. Read more: http://www.ehow.com/video_12214988_fi…
- Category: Howto & Style
————-
Appendix C VIDEO – Reinsurance the perfect Hedge Fund Strategy to Diversify a Portfolio – https://youtu.be/rfp2gRsFD2M
Published on Mar 2, 2016 – Jane King interviews Don Steinbrugge, Managing Director, Agecroft Partners. For more information please visit http://www.agecroftpartners.com
- Category: People & Blogs