Insurance penetration figures misleading… NIC wants formula reviewed

The current two per cent insurance penetration quoted by industry players may not be representative of the actual situation on the ground as the formula for arriving at the figure is exclusive of other insurance services including medical insurance, social security as well as pensions.

Commissioner of Insurance, Justice Yaw Ofori, said in other jurisdictions, these various insurance services are aggregated to arrive at a national insurance penetration and called for a national definition of the concept.

In Ghana, however, traditional insurance is the only indicator for arriving at insurance penetration.

In an interview with Goldstreet Business, Ofori who favoured a review of the indicators for ascertaining the penetration level, disclosed that the National Insurance Commission (NIC) has made recommendations to be delivered to the Finance Ministry for consideration in that direction.

He also indicated that the insurance regulator was collating figures from other sister regulators in the insurance space in an attempt to ascertain the penetration level of insurance of the various agencies as well as a national insurance penetration indicator.

“I believe that if we should add them like it is done elsewhere, insurance penetration would be more than we are looking at.”

The Commissioner also bemoaned the level of insurance and assured that the figure would increase to double digit in the next three years as the NIC reviews some of the legislative tools needed to increase insurance consumption.

Conceding that not much has been done over the years, he said a bill is to be sent to parliament which when passed, hopefully by end of year, would enforce the compulsory procurement of insurance for commercial properties as well as professional indemnity insurance for persons like medical doctors.

He said the commission is currently placing much focus on insurance for low income people like micro insurance and agricultural insurance to attract that segment of the society into the insurance net.

He implored insurance companies that, “consumers can only have confidence when insurance companies are doing the right thing and designing products that meet the needs of consumers.

If we are able to do that, there will be much confidence in insurance and penetration level will go high.”

By Godfred Tawiah Gogo