Insurance GDP contributions not encouraging – Veep

Vice President Paa Kwesi Bekoe Amissah-Arthur says the contribution of the insurance industry to the country’s Gross Domestic Product (GDP) remains low despite the huge potential of the subsector.

Mr. Amissah-Arthur said this while delivering the keynote address at the launch of the 25th anniversary of the National Insurance Commission (NIC).

The launch of the week-long celebration, which is being held under the theme: ‘Advancing the frontiers of insurance in Ghana,’ coincided with the unveiling of a new logo of the NIC, as well as the renaming of its head office complex after Samuel Appiah-Ampofo, one of the past commissioners of the commission.

According to Mr. Amissah-Arthur, the insurance industry could greatly develop the national economy.

He pointed out that as at June this year, commercial banks owned 75 percent of the assets in the financial sector while the insurance companies owned five percent.

“The banks continue to dominate the financial sector. Insurance has less than five percent of the sector,” he indicated. “The insurance industry has to do more to catch up with the banking subsector.”

Insurance penetration in Ghana currently stands at two percent with mostly those in the informal sector including the poor and vulnerable being ignored, according to available data.

Mr. Amissah-Arthur stated that over the last three decades, the Ghanaian economy has witnessed tremendous growth.

He urged insurance operators to position themselves adequately to meet the changing needs of the country’s economy.

According to him, the poor and vulnerable, who are mostly not insured, are the worst affected by disasters that affect the country.

The Vice President praised NIC for the introduction of some key reforms such as the ‘no premium no cover’ and the establishment of the complaint bureau that have helped to advance the sector.

He said the Silver Jubilee Celebration should not only be used to reflect on the successes of the commission but find new ways of improving the fortunes of the industry.

Commissioner of Insurance, NIC, Lydia Lariba Bawa, for her part, gave the assurance that the NIC would do everything possible to create public awareness and education.

She said the commission had designed some micro-insurance products targeting specifically those in the informal sector such as carpenters, masons, hairdressers, among others.