Mr Kofi Andoh, the Deputy Commissioner of Insurance at the National Insurance Commission (NIC), has disclosed that the commission is building a regulatory framework to ensure active annuities market.

Mr Kofi Andoh explained that the market was relatively new and that NIC and stakeholders ensured that insurance companies had the relevant requirements, competencies, and capacities to protect customers.

Mr Andoh noted that the laws of Ghana currently permitted only the sales of immediate annuities, a financial plan that allows people to make one lump-sum contribution, and converted it into an ongoing, guaranteed stream of income for a specified period of time.

“The benefits associated with annuities cannot be overemphasized: financial security, liquidity, guaranteed lifetime income supply, maintenance of lifestyle, and ability to cope with unforeseen and unplanned expenses, to name a few.”
Mr Kofi Andoh

The Deputy Commissioner of Insurance at NIC indicated that a recent study showed that a comfortable retirement could only be realized based on how much they earned, how their families were planned, and how they prepared for retirement amongst others. He said the study found that most of the pensioners complained of receiving low pensions, which could not support their lifestyle, and most of them either lived in uncompleted buildings or were still renting.

Mr. Andoh made this known at the launch of an annuity campaign in Accra. He disclosed that NIC is developing models and governance, including investment and fund management to ensure an active and buoyant market.

The public awareness campaign is a joint initiative of the NIC and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH aimed at sensitizing about the importance of annuities as a tool for financial independence during retirement. Already, five life insurance companies had been given the clearance to start selling products that have met the requirement. The campaign objectives will be achieved through the use of television, radio, social media, and public engagement outreaches.

Training for the Life Insurance Industry

Mr Detlev Axel Jahn, the Head of the Programme for Sustainable Economic Development at GIZ-Ghana, on his part, stated that in 2020, the NIC conducted training for the life insurance industry in the design and pricing of annuity products which birthed five products that had been approved by the NIC and introduced to the market.

“With the insurance industry’s increased interest in developing annuities and a promising ensuring market, the insurance industry is now more than ever, ripe for raising awareness of liquidity risks faced by people during retirement.”
Mr Detlev Axel Jahn

Mr Jahn said although there was conflicting information about annuities, the campaign would help debunk all the myths associated with Annuities and educate Ghanaians on the need to adopt Annuities as a viable financial tool for retirement planning.

Meanwhile, annuities are a range of insurance products that provide decent periodic payments for retirees.