Some players in the insurance sector are making calls for the regulator, National Insurance Commission (NIC), to put together a claims payment database to boost confidence in the industry, educate the public on the huge sums that are paid as claims annually, and also check fraudulent claims payment.
To them the database can be categorised, and this they believe will help the sector to have a history of any person who has ever bought a policy and be able to measure the risk associated with the person and make decisions on how much to charge.
Speaking on the sidelines of the launch of the digital reward system for its customers, Managing Director of Loyalty Insurance, Ernest Frimpong, hailed the NIC for introduction of the Motor Insurance Database (MID) and urged it to come out with a Claims Payment Database.
“The system of insurance is that we should be able to segregate our insured and know what risk they pose to the insurance pool; so if you bring a less risk, we should be able to charge you lower than somebody who brings a higher risk.
“With the current system being run, because we do not have an industry-wide database on claims, we are not able to segregate. Thus, insurance premium is high for everybody or low for everybody. It shouldn’t be so; we should be able to say that for 10 years an individual has not made a claim, so their risk is a good risk and therefore we need to reward them.
“We would be able to do away with the fraudulent claims, whereby one person will do an insurance here and make a claim and then go to another insurance company and make a claim there – and would be doing a lot of fraudulent claims.
“With this database, as soon as a claim is filed with an insurance company, you just go there and you see whether that person has made a claim and how long ago. Then you will be able to find out whether it is a fraudulent claim or not. Also, when somebody is coming to do insurance, you can find the person’s claim history and be able to charge appropriately,” Mr. Frimpong told the media.
About 507,000 motor insurance stickers have been electronically issued since introduction of the Motor Insurance Database (MID) policy by NIC at the beginning of 2020.This follows an earlier 272,000 stickers issued electronically in May of this year after implementation of the policy to curb fake insurance stickers on vehicles plying the roads.
According to the Head of Supervision at the NIC, Seth Eshun, the regulator on a daily basis pays some GH¢1.6million in claims for motor insurance in Ghana. Some Insurance players believe that if a similar system for claims is set-up for the industry, it will go a long way to deal with fraudsters in the sector.