It has been estimated that more than 90 per cent out of the over 22 million Ghanaians, have not undertaken any form of insurance.
“Less than 10 per cent of the Ghanaian population has undertaken any form of insurance with any of the insurance companies,” Mr Kwame-Gazo Agbenyadzie, Managing Director of the Metropolitan Insurance Company said, attributing the situation to misconceptions about the insurance industry.
He made the disclosure at a public lecture to mark this year's insurance awareness month in Accra on the theme: “Fresh Thinking, Fresh Approach:
A Strong Insurance Industry, An Asset To The National Economy.” The programme was organised by the Ghana Insurance Association.
Presently, there are 18 insurance companies, two reinsurers, 37 brokers and over 4,000 sales representatives.
Despite the non-interests shown by most Ghanaians in insurance, Life Assurance business in Ghana for instance, has been steadily picking up after about two decades of decline.
The gross market premium for life has increased from ¢52 billion in 2001 to ¢489 billion in 2006, while its market share has also jumped from 16 per cent in 2001 to 30 per cent in 2006.
Growing at an average annual rate of 57 per cent, it is anticipated that life premiums could reach about ¢700 billion by the end of the year.
Over the same period, the number of registered life insurance companies doubled from 3 to 6 and it is anticipated that about 10 more life insurance companies will be added to the existing number soon.
Mr Agbenyadzie said: “Most of the victims of the flooding incidence were not insured; hence their dependence on government to come to their aid.”
He believes that the plight of the victims would have been lessened if they had undertaken one or more forms of insurance.
Mr. Agbenyadzie mentioned competition, financial constraints, emerging risk, and technology, lack of human capital, regulatory framework and consumer protection as part of the limitations to reaching the uninsured.
He urged insurance companies in the country to develop innovative products and also “compete with product differences instead of prices”.
“Consumers are always pushing us to reduce premiums and we are always trimming to satisfy them. This is not good for the industry”.
Prof Atsu Ayie, a lecturer at the University of Ghana, giving a perspective of the consumer, said people do not trust the insurance companies because it takes a long time for claims and compensations to be paid.
He therefore said the issue of prompt payment of claims must be looked at seriously.
The lecturer observed that lack of coordination amongst the various stakeholders in the industry is one of the major factors affecting its growth.
He advised the insurance companies to broaden their horizon and de-emphasis motor insurance.
By law all vehicles are to be insured; hence the over sale of motor insurance.
He agreed that insurance is a very essential factor for the growth of the economy and urged the public to undertake one or more forms of it.
By Emelia Ennin