Insurance penetration may not increase due to coronavirus pandemic – NIC

Insurance penetration in Ghana may not witness an increase as earlier projected should the Coronavirus outbreak persist, the National Insurance Commission (NIC) has said.

According to a Deputy Director at the NIC, Ghana’s insurance sector which currently has a 2 percent penetration rate coupled with the coronavirus could adversely affect life insurance policies sold to the public by insurance firms.

Speaking in an interview with CitiBusiness, Michael Kofi Andoh, said due to agents selling most life insurance policies to the public, the three-week partial lockdown and the subsequent restrictions on movement has slowed down business.

“There are some expected or assumed cases but because we don’t have the figures now, we don’t know exactly to what extent. We are expecting that especially the life side will be hit a little bit harder because life is usually sold by agents,” he explained.

“An analysis of our distribution channel tells us that about 65% of life businesses is sold by agents and so when you have this lockdown, and social distancing, you have businesses slowing down because insurance is sold and not bought,” Andoh stated.

“So, when you cannot get close to people and sell to them then it’s going to affect the business. So, we are expecting that both life and non-life will be impacted, but because the day to day selling goes more with the life we are expecting that the life will be hit harder than non-life,” he concluded.

Meanwhile, On January 1, 2020, the NIC began the implementation of the Motor Insurance Database (MID) policy to clamp down on the menace of vehicles with fake motor insurance stickers plying on roads.

The Commission issued a directive giving all insurance companies up to January 20, 2020 to migrate all their information to the new Motor Insurance Database (MID) system.