Chief Executive Officer at Hollard Insurance, Patience Akyianu, has called on key stakeholders in the insurance industry to put mechanisms in place to deliver a more robust sector, arguing that this will be will be a fundamental component in the overall post-pandemic economic recovery process.
She stated that this must be done as a matter of urgency, to boost investor confidence, particularly foreign investors, especially as Ghana has proven to be a haven for foreign direct investment (FDI).
This comes after Ghana defied the global trend of reduced foreign investment and capital flight in the wake of the pandemic by recording some 400% growth in FDI year-on-year, according to data made available by the Ghana Investment Promotion Center (GIPC). She stated that failure to take advantage of the disruption to drive the sector forward would be a disservice with far-reaching consequences.
Offering these thoughts in an exclusive interview with the B&FT, she cited existing literature which points to the positive correlation between variables such as insurance premium, asset size of the industry, total investment of the industry and FDIs to buttress her position.
Ms. Akyianu suggested that a more proactive approach to risk management and risk financing will result in a more robust insurance industry, which is non-negotiable in the pursuit of the much-touted Ghana Beyond Aid agenda and will prove a critical component in consolidating gains from the impending Africa Continental Free Trade Area (AfCFTA).
“Insurance is about risk management and the provision of risk mitigation options to meet the needs of clients. A well-developed insurance industry gives investors’ confidence in the economy. It is important that institutionalised mechanisms to transfer risk to the appropriate party are available and insurance provides just this kind of assurance.
In terms of the impact that this will have, the fact that businesses will be able to undertake productive risk, knowing that they are covered will surely increase investment for economic development,” she said.
She added that this will have a cyclical impact on the industry as enhanced investor confidence will lead to FDI directly into the insurance industry as well as an indirect effect from other businesses increasing their patronage of insurance products.
The two most important factors required for driving growth in the industry, she noted, are the pace at which technology is adopted by firms and consumers alike as well as the rate of valid claim payments.
“Recent events have shown us that technology is the game-changer and if we are going to deepen industry penetration, especially in the face of increasing uncertainty globally and locally, then we must be efficient in all our processes from the purchasing of insurance products to claims payment. Automation is the only way we can achieve the required level of efficiency,” she stated.