Ghana: Insurance Companies Must Develop New Products - Commissioner

21 October 2020

The Commissioner of Insurance, Mr Justice Ofori, has advised chief executive officers (CEOs) and chief finance officers (CFOs) of insurance companies in the country to take advantage of the risk management opportunities occasioned by the emergence of the COVID-19 pandemic.

He said the CEOs and CFOs must rethink the ways of doing business, develop new products to meet the demands of the era as this would help them weather the storm against any unforeseen risks that may rear their ugly heads in the future.

Interacting with the top level management of the country's insurance industry at a capacity-building workshop organised for CEOs and CFOs of insurance companies, Mr Ofori urged the participants to pay particular attention to their financials in order to grow their business operations.

CEOs and CFOs of insurance companies were schooled by seasoned insurance practitioners among others in various subjects during the five-day workshop on how to handle business operations in the face of the pandemic.

Speaking of the impact of the COVID-19 pandemic on the insurance industry, Mr Ofori advised that, insurers should engage their clients in question-and-answer sessions regularly, as this would enable them know the prudence or otherwise of the risks they were accepting.

This approach, he added, would also engender trust between the insurers and their clients.

Touching on the minimum capital, the Commissioner used the occasion to encourage companies to consider mergers as a strategy for struggling companies especially as the deadline to meeting the minimum capital of GHC50 million fast approaches.

The announcement of the new minimum capital requirements (MCR) in June 2019 has provided the opportunity to insurance entities to adequately prepare to recapitalise by the June 30, 2021 deadline.

The new MCR, Mr Ofori said was to improve the operational efficiency and financial capacity of regulated entities to improve retention and profitability which would naturally culminate into prompt claims payment thus inspiring confidence amongst members of the insuring public.

"Mergers and acquisitions are possible strategic decisions that insurers may have to take in order to meet the new requirements," he said.

Participants were taken through an overview of the insurance industry, gaps in products and distribution channels, NIC's regulatory requirements as well as insurance disruptions occasioned by the COVID-19 pandemic and how to be innovative in order to continue to stay in business.

"Solid decision-making will hinge on your willingness to always be learning--about your industry, your competition, and your own weaknesses and strengths," he said.

Brigadier-General Emmanuel Kotia of the Ghana Armed Forces took the CEOs through the strategies for managing companies from the Military perspective.

The NIC instituted an Insurance Education Fund to build capacity in managerial competences by educating insurance practitioners to enable them be abreast with developments in the emerging business space.

Since 2018, residential capacity building workshops have been organised annually for all levels of the industry personnel including directors and shareholders, principal officers and middle level management staff.

These workshops are facilitated by the Ghana Insurance College and are fully financed by the NIC.

More From: Ghanaian Times

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