Insurance companies currently operating in Ghana would know their fates come November after they successfully submitted their respective initial recapitalization plans to the National Insurance Commission.
The Deputy Commissioner of Insurance of the National Insurance Commission (NIC), Mr. Michael Andoh in an interview on the sidelines of the 2019 Educational Conference and Annual General Meeting of the Chartered Insurance Institute of Ghana (CIIG) said his outfit was currently analysing the plans of the insurance companies and would reply the companies in November.
“Yes, the plans have come in and they are analysing them. The plan said that we would get back to the companies with our comments and our input by November and we are on track to do that”, Mr Andoh said on the sidelines of the conference in Kwahu on Thursday.
“All of them have submitted their plans, so we are reviewing them. I didn’t say they all submitted plans that we are happy with, all of them have submitted something and we are reviewing them and we will get back to them”.
He also stated that the NIC was hopeful that a new insurance bill which aims aims to address some issues in the industry will be presented to parliament before the end of the year.
“We are still at the Ministry level, it has to go to cabinet for approval and then from there it has to go to Parliament. We are hoping to deliver it to Parliament before the year ends. We are hoping that it will be passed before the end of next year, “he added.
It will be recalled that in June this year, the NIC increased the minimum capital requirement of insurance companies by over 300 percent. The NIC also directed the affected institutions to submit their initial recapitalization plan by August 31, 2019.
It increased the minimum capital requirement to GH¢ 50 million from GH¢15 million for Life and Non-life insurance companies
For reinsurance companies, the minimum capital requirement was increased to GH¢125million from GH¢ 40 million.
For insurance broking companies and loss adjusters, the minimum capital requirement was increased to GH¢500 million from GH¢300 million.
The minimum capital requirement for reinsurance broking companies has however been maintained at GH¢ 1 million.
The affected institutions have been given up to June 30, 2021, to meet the new requirements.
Currently, there are 142 regulated insurance entities made up of 24 life insurance companies, 29 non-life insurance companies, 3 reinsurance companies and 85 insurance brokers and loss adjusters.
Speakers at the conference painted a bleak picture of the insurance sector but were hopeful that with the adoption of best practices and education of the general public the sector would witness a boom.
Mr Andoh mentioned that the industry was small because of a poor insurance culture which arose of of the poor reputation of insurance companies.
He said industry was challenged because it had not yet found an innovative way to insure the masses who were employed in the informal sector.
Addressing the theme, “Improving Professional Insurance Practice, Back to Basics”, Rev. Asante Marfo-Ahenkora is the President of the CIIG, described as ” not respectable” how in 2018, the sector had an asset base of GH¢ 6.2billion and total industry profit of GH¢ 202million which represents a 3.62% profit return with the
He said: “…that is not respectable to say the least when inflation is about 10%.The worsening trend over the last 3 years, is alarming especially for the non-life side which recorded losses as an industry as follows; in 2016, 42 million, in 2017, 52million, and in 2018, 120million. This should be a concern to all professionals to wake up and do something about it.
‘Certainly if these trends continue, as we are seeing now with investments figures, we shall be recording industry losses which will erode shareholders capital and make investment in Insurance further unprofitable for investors”.
He also adviced insurance companies to desist from negative practices which portray them as dishonest in the eyes of the public.
“We should stop the “flowing with the tide” and go back to the basics” in our practice as the industry is supposed to be run by professionals and not hawkers”. Price undercutting with the excuse that everyone is doing it is not helpful to us”.
The Chairperson of the CIIG Awards Committee, Ms Lydia Lariba Bawa announced that the institute would hold it’s maiden awards to recognise industry stalwarts in November.
She said a total of 28 awards would be handed out in four categories namely; Individual Awards, Insurance Industry Company Awards, Related Industries Company Awards and Honorary Awards.
“Just like how other sister industries such as the Banking Industry have their own awards scheme, the leadership of the ClIG is convinced that the time has come for the Insurance Industry to also have its own, and there is none better to organize it than the ClIG itself, the umbrella body under which all the professionals in the Industry fall. The plan is to make the awards an annual event to acknowledge the contributions of Individuals and Companies towards the growth and development of the Insurance Industry”, Ms Bawa stated.
“The uniqueness of this award scheme is that it has the support of all the industry bodies. This is critical considering that we are in an era where rumours of awards being sold abound to the extent that some of these awards are worthless. The credibility of the CIIG as the professional body for insurers is untainted and I can say for sure that the Institute enjoys the confidence and trust of the Industry”.