Insurance contribution to GDP still unimpressive – Commissioner
The Commissioner of Insurance Ms Lydia Lariba Bawa, says the contribution of insurance to Ghana’s gross domestic product (GDP) is still a little above one per cent, while the rates are higher in other African Countries.
She explained that Kenya and Mauritius, for instance, contributed 3.1 per cent and 3.7 per cent respectively, in insurance to their countries GDP rates.
“This calls for concerted efforts to develop the market,” she said. ”The National Insurance Commission (NIC) has therefore taken a number of steps to develop the market,” Ms Bawa said, speaking at the launch of GN Life Assurance Company Ltd, an insurance company established by the Groupe Nduom (GN) conglomerate.
Ms Bawa said the NIC had implemented various measures to increase the low financial literacy level, especially regarding insurance so that the citizens would understand the issues and sign onto the many insurance products available on the market for their benefits.
She announced that the NIC had also appointed an industry committee to make recommendations on compulsory insurances to help grow the penetration level as well as to provide reliable means of compensation for those who had suffered sicknesses, disability, bodily injury, death or financial loss.
The NIC, she said, also had plans to engage experts to help develop an appropriate regulatory framework for the Insurance sector in order to facilitate the provision of acceptable forms of insurance to the Muslim Community.
Ms Bawa, however, said the country’s micro-insurance regime was doing well as it had been acclaimed in many parts of the world, and as of December 2014, micro-insurance covered about 7.5 million lives, about 29 per cent of the population.
“This gives a lot of hope because as the saying goes, the micro-insurance business of today, if nurtured, will become the conventional insurance business tomorrow,” she said.
The Commissioner urged insurance companies to take advantage of information technology to make inroads in the industry as the NIC took measures, including reforms and regulatory regimes, to expand the insurance market.
She said the insurance industry should not see the reforms as regulatory requirements that must just be complied with, but to seek to understand how the effective implementation of the reforms could contribute to their profitability and financial soundness.
Dr Papa Kwesi Nduom, the President and Chairman of GN, said the launch of the GN Life Insurance product into the Ghanaian market was to provide alternative social and economic protection for Ghanaians because the social protection currently being enjoyed in Ghana was not widespread.
“We will lead the insurance revolution in Ghana; we will walk to the doorsteps of every Ghanaian to bring the services to the people,” Dr Nduom said.
Mr Fiifi Simpson, Chief Executive Officer of GN Life, said GN Life Assurance was licensed in September 2014 by the NIC and started operation in July 2015.
He said the NIC also gave the Company approval to establish Bancassurance relationship with GN bank and that relationship had given the GN Life a presence in 227 branches and locations across the country.
“We have started the process to set up our own branches in very strategic locations all over the country to have our products available to individuals and corporate entities through our tied financial Advisors,” he said.
“We will be innovative in our approach to distribution. This will include the informal sector of our economy; after all, it is much bigger than the formal sector.”
Mr Simpson assured the public of prompt claims settlement and customer-centred approach to services.
“It is our belief that GN Life is here to contribute significantly to the growth of Life assurance in Ghana and eventually be a dominant player in the market,” he said.
Source: GNA