Insurance industry seeks bigger business volumes

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…following 4th insurance awards

A fortnight ago, the 4th edition of the Ghana Insurance Awards brought together industry chieftains from among the various segments of the country’s insurance industry at the Kempinski Gold Coast Hotel, to celebrate the companies and individuals adjudged to have been most outstanding in their performance and most exemplary in their conduct. General insurers, life insurers, insurance brokers and reinsurers were present representing the traditional insurance community but alongside them, was representation from the new genres of insurance service providers – micro-insurance companies and private health insurance coverage providers. Altogether 36 awards were conferred on companies and individuals.

The biggest winners on the night included some of the oldest insurance firms in Ghana with the longest track records of accomplishment such as the Enterprise Group with Enterprise Insurance winning the general insurance company of the year award and its sibling, Enterprise Life Assurance Company, winning the life insurance company of the year award. Instructively Acacia Health Insurance, recently acquired by Enterprise was adjudged Brand of the year fir health insurance.

Indeed private health insurance was prominent at the awards with several categories in this industry segment up for grabs; and just as with the other segments the awards were widely spread among competing forms evidencing the fierce competition in the industry. With regards to private health insurance, Cosmopolitan Health Insurance was conferred with both the indigenous company of the year awards and the ICT Leadership Award, Apex Health Insurance won the Best Growing Company, GLICO Healthcare won the award for Product Innovation, and NMI Nationwide Medical Insurance won the marketing initiative award.

Instructively Milife, from the recently emergent micro-insurance category was adjudged promising insurance company of the year, and Emerging Brand, while BIMA, another leading dedicated micro-insurer, won the award for mobile insurance leadership.

Star Life won the indigenous insurance company of the year award, NSIA Insurance won the Best Claims Initiative of the year award, prudential Life won adjudged best in life insurance product innovation while Quality Insurance was declared best in product innovation in general insurance. GLICO Life was adjudged best personal lines insurer while Old Mutual Life Assurance won the award for Marketing Initiative of the year.   

But arguably the most outstanding winner on the night was Hollard Insurance, the international insurer winning the award for Commercial Lines, Brand of the Year and Fastest Growing insurer.

But even more impactfully, Hollard is building on its exemplary showing at the awards to push for improved insurance penetration across the country with the entire industry standing to benefit. Last week, the company hosted a symposium at its Accra Head Office at which a few journalists led by CITI FM and TV‘s Bernard Avle, the current journalist of the year, gave the views on how the media sees the insurance industry.  The event, hosted by Hollard (general’s) managing director, Daniel Boi Addo, also included Seth Eshun Head of supervision at the National Insurance Commission.

Several challenges were identified which are constraining insurance penetration in Ghana which stands as a disappointing less than three percent, which is barely half of Nigeria’s penetration rate  and less than one-third of South Africa’s.

Lack of awareness of the benefits of insurance – for long identified as the primary constraint – was reiterated. Here, a combination of cultural and economic treasons work in combination. From a cultural perspective, Ghanaian society tends to believe that preparing for a disaster – or even just discussing one – is likely to make it happen. Therefore taking an insurance policy would increase the chances of the risk being insured becoming reality.

Economics plays a crucial part. The conventional wisdom is that low incomes on average make insurance a low priority in most household budgets and even business enterprises see not taking it as an opportunity to cut costs too. But the problem goes further. In Ghana’s high interest rate regime most people see more economic value in interest bearing accounts than in insurance policies even though the latter provides risk management which the former does not. This explains the relative popularity of universal insurance products (which combine risk cover with some level of interest accumulation. However insurers admit they need to come together and convince the banks that act as custodians of insurance funds to offer better rates on those deposits so they the insurers, in turn can offer higher rates to their universal products customers.

However at the forum there was a general consensus that insurers have upped their attractiveness in recent years, being more trustworthy with regards to claims payments (under the stricter enforcement of compliance regulations by the NIC) and having become more customer friendly by employing digital channels of product and service delivery thereby making for more convenience for policy holders.

Even as the winners at the most recent Ghana Insurance Awards engage in deserved self-congratulations, it is forums such as the one that was hosted by Hollard last week that hold the key to attracting more customers, more business and ultimately more revenues.

This is more crucial than ever before as the clock ticks down to the deadline for major recapitalization set by the NIC, which requires an increase in minimum capital of over 200 percent in an effort to give the local industry more capacity and therefore keep more of the premiums they receive in the country rather than pay them out to foreign re-insurers. – Goldstreet

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