The National Insurance Commission (NIC) must increase the number of compulsory insurance products and services to protect the vulnerable in society, Albert Eyeson-Ghansah, Chief Executive Officer of Bedrock Insurance, has said.
“I support increasing the number of compulsory insurance products and services, because apart from the fact that it makes the work of insurance companies easier, it also protects the lives of innocent third-parties,” he said in an interview with the B&FT.
Currently, in Ghana insurance companies underwrite two compulsory insurance policies: Motor Third-Party policy and the Fire policy (for Private Commercial Properties). But the NIC has pointed out that it seeks to widen the mandatory insurance net through a review of the Insurance Act to include others like workmen’s compensation, group life insurance, and professional indemnity.
Mr. Eyeson-Ghansah therefore called for the addition of products and services such as public liability insurance – which covers the cost of claims made by members of the public for incidents that occur in connection with a business’s activities; and product liability insurance, which protects against claims of personal injury or property damage caused by products sold or supplied through a business.
“In future, the NIC should take a cue from the UK where product liability and public liability are compulsory,” he suggested.
Education and enforcement are key to growth
But Mr. Eyeson-Ghansah pointed out that legislating compulsory products and services alone will not see a boost in premiums; rather, consistent and effective education and enforcement of the laws will produce better results.
“Take motor insurance for example, because police officers constantly check for insurance stickers, that has led to people purchasing the product for fear of being harassed by police officers,” he said.
He explained that due to insufficient enforcement on another compulsory insurance product – the Fire policy (for Private Commercial Properties), there are shops, schools, factories which have not taken the policy.
“Legislation is one thing, but without adequate education and enforcement there will be no boost in premiums. The new bill, when passed, without education and enforcement will have no impact. Insurance industry players, including brokers, regulators and companies, must educate the general public,” he added.
“Take the professional indemnity, for example; if there is a hospital where the doctors do not have professional indemnity, a patient can decide not to go there because if something wrong happens, s/he might not get the required compensation,” he noted.