Key insurance industry indices in Ghana as reported by the latest research report by the National Insurance Commission’s ‘Public Perception and Confidence of Insurance in Ghana’ survey indicate a sharp improvement in awareness, appreciation and confidence among the general public. The latest NIC survey reports an average confidence index of 61.65% and an improved perception index of 53.3%. The industry regulator reports that 75% of the sampled population has basic knowledge of insurance.
However, while referring to these results during his inauguration last week as President of the Ghana Insurers Association for a second consecutive term, Seth Kobla Aklasi – who is Board Chairman and CEO-Donewell Insurance – admitted that: “These are important results for us as an industry, but definitely not sufficient for our survival if they are not translated into increased uptake and penetration of insurance…which continues to hover at around 1%”.
Actually, this suggests that while appreciation of insurance has expanded, actual penetration has shrunk; it had hitherto been generally estimated at 2%, although if patronage of (limited) micro-insurance cover is added this increases five-fold. The ongoing economic challenges in Ghana have been widely blamed for the fall in penetration, and further pressures are expected as government has removed non-life insurance from its Value Added Tax exemption list – creating the spectre of up to 17.5% increases in non-life insurance premiums.
During his second term as GIA President, Aklasi intends to confront key issues in the industry head-on – if his inaugural speech is any indication.
The GIA is a prominent trade association for all companies registered and licenced to transact insurance business in Ghana. It serves as the collective voice and representative body for insurance companies, reinsurers and other entities operating in the insurance sector. Established to promote growth and development of the industry, GIA plays a crucial role in shaping policies, fostering collaboration and advocating for the interests of its members. The Association was registered under the Companies Code 1963, Act 179, as amended by the Companies Act 2019, Act 992.
Along with Aklasi as its president for a second term, the new GIA Board comprises: Henry Bukari, MD-Phoenix Insurance; Tavona Biza, MD-Old Mutual Life Insurance; Nashiru Iddrisu, MD-Hollard Life Insurance; Mrs. Mercy Boampong, MD-Serene Insurance; Oliver Akubia, MD-Millennium Insurance; Eric Ato Botchwey, MD-Donewell Life Insurance; Ms. Akosua Ansah Antwi, MD-Enterprise Insurance; Sheriff Abudu, MD-Impact Life Insurance; and GIA-CEO, Dr. Kingsley Kwesi Kwabahson.
However, some of the issues being raised for attention about the industry by Aklasi are already stirring up some degree of controversy among members with vested interests in the various aspects of the industry he wants addressed.
He intends to strengthen the GIA’s self-regulatory function. He is particularly concerned about the association engaging introspection with regard to pricing. “The NIC sets minimum tariffs in conjunction with the GIA; and instead of following suit we want to outdo one another by charging less than what has been authorised,” he noted – querying “Why can we not choose to revise prices based on macroeconomic indicators to return better profits from which we all benefit?”
Indeed, he blames the common tendency of retiring insurance chieftains setting up brokerages on their inability to earn enough money to retire and subsequently simply rest.
He argues that lack of scientific foundations for pricing also leads to underpricing, or overpricing in some cases. “There is a need to create relevant databases that serve as sources for analytics and scientific pricing tools,” he asserts. “We do not have a database that accurately gives us, for instance, injury and death payouts under motor; or the own-damage component.” He questions the justification for certain tariffs, and whether they are adequate or amount to overcharging.
Then he takes on the regulator and government itself. “We cannot continue to rely on the NIC, since unfortunately some of their interests and effects of the invisible hand will not always necessarily seek the GIA’s best interests,” he asserts. “The far-reaching executive powers of the 4th Republican constitution and the much-talked-about amendment are needed to curb the inimical influence of government’s executive arm in the form of politicians.”
He therefore argues that insurers must work closely with judicial and parliamentary institutions, and have a voice in laws governing insurance operation.
He has a plan to meet these challenges: “I intend to strengthen our collaboration with these institutions, as well as have a monitoring system that allows us to have inputs into various insurance related legislations. The establishment of a Legal Database – a database of all Ghanaian insurance cases – and collaboration among all legal officers of member-companies will allow us opportunity to appreciate the legal reasoning behind decisions of the courts; and this will serve as a useful guide in determining how we underwrite and address imminent litigations.”
The Aklasi-led GIA Board has big ambitions toward improving the efficiency of insurance operations in Ghana. But first, the Board will have to get the buy-in of its members, regulators, legislators and other stakeholders whose immediate reaction to the GIA President’s list of shortcomings remains to be seen.
