Commissioner of Insurance, Madam Lariba Bawa, has stated that insurance companies must be financially sound and liquid to be able to honour their obligations.
This, according to her, requires that insurance companies hold adequate capital as well as have appropriate plans in place to mitigate risk inheritance in their business activities and environment.
She said the risk based capital adequacy framework implemented by the National Insurance Commission was intended to achieve this objective.
The commissioner of insurance said this yesterday at the 4th National Life Insurance conference organised by the Ghana Insurers Association in Accra on the theme: “Extending Coverage Of Life Insurance in Ghana: A Collective Responsibility.”
She explained that to extend the coverage of life insurance, there was the need for appropriate products that meet the needs of the various segment of the population.
Such products, she said, must be designed to address specific occupational and lifestyle needs so as to improve customer value.
We also need to pay attention to the need for suitable and cost effective distribution channels to ensure that the products are delivered to the intended market,” she said.
Closely related to this, according to the commissioner, was the need for appropriate payment system that will help extend access to all Ghanaians irrespective of their geographical location or economic status.
She therefore, urged insurance companies to invest in technology to avail themselves of the opportunity presented by the emerging digitisation of the financial services landscape.
“Perhaps, the most important issue that needs attention is the fair treatment of customers. Treating customers fairly will go a long way to improve confidence in insurance. Fair treatment of customers requires sales agents to clearly explain the features and all terms and conditions of the product at the point of sales and not at the point of claims. The terms and conditions must be conspicuously displayed in the policy document clearly brought to the attention of the customer. There must also be effective and easy to use avenues for customers to seek redress if they have grievances and complaints,” she added.
More importantly to the National Insurance Commissioner, insurance companies must cultivate the culture of paying legitimate claims promptly and adequately.
That, according to her, was critical as people tend to understand and appreciate what they do more than what they say.
“Selling the product is just talking; paying the claims promptly and in the right quantum is when we walk the talk. Until we do so, the insuring public will not take us serious and it will be almost impossible for us to extend the coverage of insurance any further,” she noted.
She revealed that life gross premium income grew by 22% from 680 million cedis in 2015 to 828 million cedis in2016 whereas non-life premiums grew by 25% from 855 million to over I billion cedis over the same period.
She said even though non-life has a relatively higher premium income, life recorded total of assets of 2.1 billion cedis as compared to 1.5 billion for non-life.
“Despite this, the coverage of life insurance is still very low. There is there the need to increase the capacity of the industry and provide appropriate regulatory interventions to improve access to insurance to the average Ghanaian,” she added.
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