Chief of Executive Officer of Africa Surety and Insurance Advisory, Solomon Lartey has said the new insurance bill approved by Parliament will deepen the insurance penetration and place the industry to handle the insurance of the African Continental Free Trade Area (AfCFTA).
According to him, the provisions like the Insurance Education Fund, the Agricultural Insurance Fund and the introduction of some compulsory insurances are feasible and would go a long way to enhance the image of the Ghanaian insurance industry and increase insurance penetration in Ghana, which is still below 2%.
“I think the issue is that, of course the insurance penetration in Ghana is very low, there’s no doubt but the introduction of certain elements into the new insurance bill as I see it are likely to increase insurance penetration.
“I think that agreement streamlines business processes on the continent to make it easier and more accessible to access various markets within the continent and so, if insurance companies in Ghana, for instance, will take advantage of that, then of course it’s going to help increase penetration”.
Mr. Lartey further revealed that Insurance Bill will strengthen the hand of the regulator and sanitize the industry, adding that this, coupled with good corporate governance and capitalization would benchmark the Ghanaian Insurance Industry against International best practice and ready itself for the demands of the African Continental Free Trade Agreement (AfCFTA).
Additionally, he noted that not all the expected compulsory insurances such as new Insurance Bill, Workmen’s Compensation, Group Life, Public Liability, Professional Indemnity, Insurance of Commercial Buildings and Marine Insurance would be made compulsory in Ghana.
“I am informed that not all the expected compulsory insurances were granted but the details of which insurances had become compulsory in Ghana would be announced soon by the NIC.
“I think that some of the initiatives they’ve introduced would help… first is the issue of undercutting, they’ve introduced a minimum rate and I think that if insurance companies themselves will comply with those minimum rates, then it will help reduce the issue of undercutting.
“There’s also low premium, low cover which means that debt, outstanding premiums that have not been settled will all be catered for. If all these things are done, income to insurance companies are likely to increase and if they increase, insurance companies will be able to settle their obligations.
“I think the new bill the National Insurance Commission has introduced is a good thing [and] it’s going to help the industry”
The ASIAC boss exclaimed that local insurance and reinsurance companies must now brace themselves to provide international level solutions beyond the borders of Ghana; by so doing, they would be able to benefit immensely from the trillion-dollar investment framework of the AfCFTA.
“My message to the players in the Ghanaian industry is now is the time. There’s a very big field out there for everyone to benefit from. I think they should venture out there and do some of the great things they are doing in Ghana in other places”.