More needs to be done to increase the insurance sector’s contribution to GDP, from as low as about three percent to a level where it can contribute significantly to national development, according to the Northern Region Manager for National Insurance Commission (NIC), Joseph Akalam.
According to the NIC, in 2017 the ratio of insurance premium to GDP stood at 1.2 percent while the number of people covered was 30 percent – a situation Mr. Akalam described as unacceptable.
“Requirements of traditional insurance policies and the operational processes are cumbersome, thereby excluding a section of the populace from having insurance policies to contribute to GDP and also their future,” he said.
Mr. Akalam, who spoke at the launch of three micro-insurance products by Quality Life Assurance Company Limited (QLAC) in Tamale, attributed the sector’s low contribution to national development to lack of education on the importance of insurance, as well as the conduct of some industry players.
He was however confident that the ongoing recapitalisation exercise – in which insurers are required to increase their minimum capital from GH¢15million to GH¢50 million by June 30, 2021 – will not only lead to an increase in insurance penetration but also the sector’s contribution to GDP.
When completed, it is expected that the recapitalisation will propel the sector’s contribution into double figures.
For instance, the regulator expects that insurance’s contribution to GPD will increase to 10 percent in the next few years, on the back of new business lines such as bancassurance, micro-insurance and mobile insurance, as well as a good regulatory environment
Launch of micro-insurance products
The three policies dubbed; Fa Bi Sie, Wo Ba Daakye, and Emma No Ento Wo Ansa, are aimed at easing the stress informal sector workers go through when they go out of active service.
The launch also saw the inauguration of QLAC’s new Tamale office complex, which the company said is part of its strategy to bring convenience to customers.
Commenting on the new products, Mr. Akalam was upbeat that they would help address some of the fundamental challenges facing in the industry in its bid to provide insurance to those operating in the informal sector.
“Insurance provides protection for life and property and funds for development. And it does this through by pooling together individual and group resources against times of uncertainties,” he noted.
Deputy Chief Executive Officer of QLAC, Thomas Daniel Appiah, said the growing economic crisis requires that people put aside some funds while they have stable jobs, so they can fall on such resources during their times of need.
“Although the informal sector forms the biggest segment of the economy or employment, it is mostly left when it comes to policies and programme. It is therefore for this reason that QLAC is introducing these three products to help those in the sector,” Mr. Appiah said.
He also assured the insuring public of the safety of their funds, and that a lot of research went into their development so as to ensure smooth implementation.
QLAC, he added, is a well-run Catholic-owned Insurance company that has been legally registered and is regulated by the NIC. He therefore encouraged members of the informal sector, especially traders, to take advantage of the products being offered to secure their future and that of their dependents.