NIC asked to ward off unethical insurers
The regulator of Ghana's insurance industry is being tasked to strengthen its monitoring mechanisms to guard against what sector players term 'unethical penetration strategies'.
About ten new foreign companies have ventured the local market in the last couple of years, bringing healthy competition to the sector.
Insurance Broker, Charles Bennin notes the entrance of new firms in the Ghanaian insurance business is positive for industry growth.
He however tells Luv Fm the growing competition breeds survival tactics which can be unprofessional.
Mr. Bennin expects the National Insurance Commission to check unethical practices to protect the interest of the insuring public. “They do what we call undercutting because they want to survive and it is high time the regulator came up to sanction those involved in the undercutting and other unethical practices.
“Because at the end of the day, if adequate premiums are not paid, when there is a loss, it becomes very difficult for insurers to pay and they'll want to come out with all sort of unsubstantiated excuses to repudiate such claims”, the Broker noted.
Meanwhile, Mr. Bennin expects local insurance companies to join resources to form consortiums in order to compete against other offshore insurers in the country's oil sector. He said “it is on record that the local market may not be able to absorb even five percent of this risk and for them to be able to build their capacity to take care of the risk associated with the oil find, there is the need to build consortium to increase capacity to insure”.
Mr. Bennin said this is the only way to grow the local insurance industry, emphasizing that “if we allow offshore insurers to insure this (oil) risk, just because we're not adequately capitalized to insure such risk, then it's not good for the economy”.
The Insurance broker has also called for increased public education in the management of risks associated with the oil exploration.