Abuakwa South MP Demands Tax Reliefs for Insurers as Flood Claims Hit GH¢500m

Member of Parliament for Abuakwa South, Dr. Kingsley Agyemang, is urging government to introduce emergency relief measures for insurance companies as the industry faces mounting pressure from claims arising from the devastating June 29 floods that killed several people and destroyed properties across Accra and other communities.

The insurance expert says the sector is under severe strain, with flood‑related claims expected to surge significantly.

Dr. Agyemang is calling for the immediate suspension of the newly introduced VAT on non‑motor insurance products and additional tax reliefs to help insurers stay afloat.

“There must be a waiver or suspension of the VAT on insurance products. That will definitely increase the uptake of insurance services,” he said.

He warned that the rising volume of claims could erode profitability and weaken the entire insurance ecosystem.

“My appeal to government is that there should also be some form of corporate tax waiver for insurance companies. If these companies go out of business, the adverse impact on the economy will be huge. Employment will be affected, future disasters will become more difficult to manage, and insurance penetration will decline further,” he added.

Flood claims nearing GH¢500 million

Dr. Agyemang, who has spent over two decades in the insurance industry, described the current situation as turbulent.

“We are estimating claims at almost GH¢500 million. That is going to balloon every insurance company’s claims record. It is a very turbulent time in the insurance sector,” he said.

Despite the pressure, he expressed confidence in the resilience of insurers but noted that the floods only exposed long‑standing weaknesses in Ghana’s insurance landscape.

“We didn’t need the floods to expose this. Ghana’s insurance penetration is only about one per cent of GDP, compared to the African average of three per cent and the global average of about six per cent,” he stated.

He stressed that low insurance penetration leaves households and businesses dangerously vulnerable to disasters.

“Insurance is one of the key risk mitigation tools in times of crisis. No one is immune to disasters. You could lose your home, your vehicle, or even your life. That is why we must take insurance seriously as a country,” he said.

Renews call for National Disaster Fund

Beyond insurance reforms, Dr. Agyemang renewed his call for the establishment of a statutory National Disaster Risk Management Fund to support victims and finance disaster prevention and response efforts.

“I have persistently called for a disaster risk management regime for this country. We don’t have one. That is why we often look helpless in times of disaster. If we leave insurance firms alone to deal with these events, they could become overwhelmed,” he said.

His comments come as government intensifies efforts to respond to the aftermath of the June 29 floods.

President John Mahama, during a National Security Council meeting, said government is doing everything possible to reduce the impact of flooding, stressing that while floods can be managed, they cannot be completely eliminated.

Government has since established a Post-Flood Mitigation Task Force and announced a two-day nationwide clean-up exercise to desilt drains and reduce the risk of further flooding as the rainy season continues.