There is the need for Ghana’s insurance industry to attract world-class capital to remain competitive globally, Commissioner for the National Insurance Commission Justice Yaw Ofori noted here on Wednesday.

According to him, the recapitalization process and new niche markets in the industry would be used to ensure a higher penetration rate and increased capitalization of the industry players.

Ofori said in an interview during the official launch of Loyalty Insurance that undercutting, which was widespread in the industry, was one of the key factors creating the low capital base of the insurance firms.

“The more capital you have, the stronger you are and that means international companies are ready to do business with you. You can’t be a very effective international insurance company when you are small.”

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He added that inasmuch as it was a problem for some companies to recapitalize, they would be encouraged to understand the need and benefits of recapitalization.

The new Commissioner hinted that the recapitalization should not be less than 100 percent of the current levels.

Ofori said part of his aim was to increase insurance penetration.

Ghana’s insurance penetration is under two percent with a large chunk of low income earners yet to understand the need for life insurance.

He added: “My main agenda is to increase penetration to double digits. So far, we are less than two percent and that means that we have to work more on micro-insurance and agric insurance. Micro-insurance will take care of the low income people who are in the majority to bring more people on board so that penetration will go high.”

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Ofori added that if insurance firms paid claims promptly, it would increase the confidence in the industry and encourage people to buy policies.

“Because we don’t pay promptly to our customers, and some even decide not to pay at all. They have the notion that insurance is free money and it’s not like that. If someone insures vehicle or company, the person wants to be secured and therefore we are ready to make sure that dream of the person is realized,” Rev. Kwaku Frimpong, Chairman of Loyalty Insurance Group, pointed out in a separate interview.

Instead of the six months and one year, it takes insurance companies in Ghana to pay claims, Rev. Frimpong pledged Loyalty would pay claims within a week once all information was verified. Enditem

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Source: Xinhua/NewsGhana.com.gh

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