Life Insurance contributes 0.8% to the financial sector

By: Fred Yaw Sarpong

Life Insurance contributions to the financial sector of the economy which includes the insurance industry currently stands at about 0.8%, the Commissioner of the National Insurance Commission (NIC), Miss Lydia Lariba Bawa has disclosed.

According to her, this is an indication of the extremely low level of life insurance penetration in the country. She said this in Accra at the launch of two new products from the Enterprise Life.

“Whereas this may look discouraging, the flip side of the coin is that there is a great potential for the development and marketing of life insurance in the country,” the Commissioner stated.

She mentioned that to tap into this great potential however requires hard work and dedicated efforts in specific areas.

“Insurance companies need to be adequately capitalized to enable them write and retain significant levels of premium, acquire basic operational, distribution and back office infrastructure, and optimize economies of scale,” she posited.

Miss Bawa said effective governance and risk management systems must be deployed to enable the companies minimize the effect of the environmental and operational risks that tend to militate against their profitability.

“We must continue to be innovative as an industry to find suitable and cost effective distribution channels that will help us reach the underserved segments of the market.”

She advised the insurance industry players to make available a wide range of products that meet the needs of the various segments of the population.

The Commissioner of Insurance announced that the gross premium and total assets of the life insurance sector was GHc706 million and GHc1.7 billion respectively as at the end of 2015, up from GHc187 million and GHc366 million respectively in 2010.

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