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Insurance, a safeguard for the national economy

cuba industriasHurricane Irma was possibly the most devastating weather phenomenon to ever hit Cuba. Not only did the storm cause substantial material damage, affecting some of the country’s most important industrial and tourist zones, but also had a severe impact on the national economy.

Since then, however, significant progress has been made in recovery efforts, primarily within the tourist sector.

Key to this process has been Cuba’s national insurance industry, with over 50 years experience and represented by Seguros Internacionales de Cuba, S.A (Esicuba) and Seguros Nacionales (Esen).

With major clients across the sector, Esicuba was responsible for supporting recovery efforts on this occasion, according to José Carlos Meijides Alfonso, director general of the entity in an interview with Prensa Latina.

He added that in the 15 days following Irma, Esicuba issued pay outs of 33 million CUC to tourist entities in order to help recovery efforts and ensure that facilities were promptly reopened.

“This is Esicuba’s biggest loss in its 55-year history. It came out of the entity’s over 290 million CUC business budget. However, it was a resource the company had available for a moment such as this. All tourist facilities had up-to-date policies, which meant we were able to make important payments right away,” noted Eliana Domínguez Oropesa, director of Development and Marketing, speaking with Granma International.

Previous experience in post-disaster recovery meant that Esicuba was able to respond rapidly and effectively. According to Eliana Domínguez, staff, together with inspectors and auditors from the International Inspection Agency, Claims and other related Services enterprises (Intermar S.A), and Customs Services Agency (Adesa S.A), visited the affected site to assess the level of damage and advise clients on how to proceed.

Even though Esicuba has reimbursed many of its clients following Irma, there remains much to be done.

“It’s an ongoing process. To date, not all establishments have received payments because these are large sums of money we are talking about. However, we have issued payments to clients in accordance with demand and to support the entire recovery process,” stated Domínguez.

Seguros Internacionales de Cuba S.A had made payments to the majority of its clients by the end of 2017, a process which continues through 2018.


Providing insurance to any business operating in Cuba means being able to guarantee large sums of money. We are talking about millions of pesos, too much for even Esicuba to take on, which is why it also takes out insurance.

“Reinsurance is nothing more than insurer’s insurance. In this way the risk is shared. It is a global practice undertaken by all insurance companies. These are relationships between the reinsurer and insurance companies, a joint activity between all those involved in the business so that the risk is shared and we are not left without support in the face of an eventuality.

“Insurance is a global business. Esicuba currently deals with reinsurers based in London and continental Europe. With regard to insurance in Cuba, the only area where care must be taken is regarding the economic, commercial, and financial blockade of Cuba. There can be strictly no U.S. capital involved. This generally doesn’t occur, because everyone is aware of the implications. All the same, Cuba is very careful in this regard,” explained Eliana Domínguez Oropesa, Esicuba director of Development and Marketing.


Insurance doesn’t depend of the kind of activity being undertaken but on risk factors and the probability of loss. At an enterprise level, ensuring the continuity of a project, its functioning, autonomy, and efficiency depends in large part on insurance, by ensuring that the cost of repairing, recuperating, or solving a specific problem does not come out of the client’s growth capital.

“Insurance provides you with this additional capital. You purchase a policy and are protected against loss, so you don’t have to use your money intended for productive activity. Insurance allows for continuity and swift recovery and an extra injection of capital for this activity,” stated Eliana Domínguez.

In Cuba, insurance works in the same way as it does anywhere else in the world, the only difference being that Esicuba understands, recognizes, and is prepared for the Cuban economy.

Insurance entities on the island work to international standards and deal with insurance and reinsurance companies worldwide.

“The insurance market in Cuba, and the way it was organized, underwent a radical change after the triumph of the Revolution. Economic transformations and the development of social programs were met with strong opposition from the insurance sector. A large number of owners and executives of the over 170 insurance companies that existed on the island, left the country. Around 50 were nationalized, others closed down or remained inactive, and many pulled out of the Cuban market,” explained José Carlos Meijides Alfonso, director general of Esicuba.

Given this reality, added Meijides, the idea around insurance was to protect the interests of both insurers and the country. Thus Esicuba became the first socialist state enterprise dedicated to providing foreign trade insurance, a member of international organizations, and a provider of important claims and reinsurance policies.

During its formative years, the entity offered coverage for state goods and capital linked to the country’s international economic activity; civil aviation; foreign trade; mercantile and fishing fleets; and Cuban assets abroad. Esicuba worked to raise and restore Cuba’s standing within the international reinsurance market and became a national reinsurance provider in order to satisfy domestic demand.


Socio-economic transformations in the country have seen Esicuba change over the years. Today, it offers over 40 products supporting the country’s economic development and key sectors.

“We have supported the development of Cuban civil aviation, the growth of maritime fleets, the establishment of new airlines and the expansion of airports. Esicuba has participated in all this development including catering services which it provides to all airlines which fly to the country,” stated Eliana Domínguez, director of Development and Marketing.

The entity has also played a key role in Cuba’s foreign trade activities, providing policies to some of the country’s largest importers and exporters.

Esicuba continues to work alongside the Ministry of Foreign Trade and Investment (Mincex) to raise the island’s profile within the international market and ensure that all Cuban imports and exports are covered by a national insurer.

“Insurance began to be offered in the tourist sector in the 1990s with coverage for hotels as well as tourists themselves, more commonly known as Traveler Assistance Insurance. Medical expense policies also started to appear for all individuals already living or moving to country,” added Eliana Domínguez.

More foreign companies began to purchase Cuban insurance and domestic demand rose across various sectors, such as industry and telecommunications. Insurance linked to onshore oil drilling emerged but on a smaller scale and was primarily associated with well management. However, in 2000 the insurance market for oil exploration began to expand, with the last big project in 2012 when deep-water offshore drilling began.

“Globally, all businesses, all companies are accustomed to having insurance. No one would dare make an investment if it didn’t have financial protection, which is why foreigners that began to come to the country sought out this service,” commented the director for Development and Marketing.

Esicuba has played a key role in Cuba’s enterprise sector, acting as a guarantor for the country’s economic activity and supporting national projects seeking foreign investment. The entity currently offers a range of policies including coverage for all business activities on the island, something that has also had a positive impact on the economy.

The most recent edition of Cuba’s Portfolio of Foreign Investment Opportunities, presented during the 2017-2018 International Trade Fair in Havana, featured two projects linked to the insurance sector. One for Credit Insurance and Protection, and another related to Esen’s Life Insurance policy. The aim of the former, according to the Esicuba director general, is to create a joint venture providing credit insurance and involving Seguros Internacionales de Cuba.

“This kind of insurance is related to a company’s commercial and credit activity. It works when a problem arises between two parties, usually banks, or bilateral trade between different entities.

“Then there is bid bond insurance. This modality is linked to contract bids where the contractor is covered under certain terms. This is very important above all when undertaking foreign investments, because it provides a great deal of transparency to third parties,” explained Eliana Domínguez.


“The creation of independent and efficient entities is a key priority within Cuba’s new economic model, a task for which insurance is vital. It is a tool in the hands of business people which provides protection and security for their activities. A prime example of how entities can recover, be compensated and have access to capital is when losses occur, which is why insurance exists.

“When large-sale losses occur, like with Irma, Esicuba has shown how insurance benefits the Cuban economy. Financial recovery will take some time because it had a significant impact on the entity and the country, but we continue to work and have not stopped receiving policy requests, and are still offering investment projects in the Business Portfolio,” added Domínguez.

Regarding strategic sectors, the director of Development and Marketing stated that the entity is currently undertaking various actions to protect new investment projects and support developing sectors, most notably health, bio-pharmaceuticals and renewable energy.

Meanwhile staff at Esicuba have the necessary training and knowledge to carry out their functions in accordance with the country’s priorities.

For his part, José Carlos Meijides Alfonso, Esicuba director general, noted that the entity’s main challenge is raising awareness among the population and entities in Cuba of the importance of insurance as tool for protection.

“It is vital to create spaces within the national context to promote a culture of insurance in the country. This is our main challenge for the coming years; expand the need for insurance in Cuba in general and the business sector specifically. In order to do so we are planning to increase communication and dissemination efforts within the market and regarding our insurance services,” added the Director General.

In this sense, Eliana Domínguez noted that work is underway focused on the island’s private sector, which includes non-agricultural cooperatives – for which specific products have been developed.

Regarding the expansion of the enterprise, Meijides added that Esicuba is working on maximizing the use of available funds, and developing market mechanisms in line with Cuba’s priorities and economic development.

The island’s insurance industry is playing a key role in the process of updating the country’s economic model. Given marked interest in foreign investment and the business sector, these services represent a safeguard for such activities and confirm the security of doing business with Cuba.


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