Tap micro-insurance to deepen financial inclusion - Minister tells brokers

Deputy Finance Minister, Helen Mona Quartey, has tasked insurance brokers and other insurance stakeholders to pay more attention to emerging insurance portfolios—specifically micro-insurance—as a means of deepening market penetration and financial inclusion.

Speaking at the third annual educational conference and exhibition of the Ghana Insurance Brokers Association (GIBA) held in Koforidua in the Eastern Region, she said that was one way insurance stakeholders can help to accelerate the national economic transformation agenda.

She indicated: “There is an available market for micro-insurance products which could be utilised by the industry to mobilise premium to deepen the sector’s impact on the economy.

“Government is committed to sustaining and accelerating the progress of the insurance market by pursuing prudent policy initiatives and measures to improve insurance penetration which currently below two percent.

“In this direction, the new legal and regulatory framework that has provisions on emerging insurance portfolio such as micro insurance will guarantee the deepening of insurance penetration and access to financial services.”

Mrs. Quartey stressed that insurance company continues to contribute significantly to economic development of the country through its risk management function and for that matter government will continue to create a favourable policy and legislative environment that will enable players to manage risks associated with production and investment.

The two-day conference brought together stakeholders to discuss relevant issues that will inure to the growth and productivity of the industry—with special sessions aimed at grooming young and aspiring practitioners to plans, share ideas, and work towards establishing strategies and partnerships that will foster healthy competition in the brokerage industry and promote confidence in the insurance sector.

This year’s edition was held on the theme “Strategising for Effective Insurance Broking Practice” with special sessions for business strategy, young executives and chief executive officers.

According to the minister, the theme of the conference was in line with Government’s overall policy of expanding opportunities for all and ensuring a firm foundation for national socio-economic transformation and commended the brokers for their quest to maintain high standards in the practice.

“Failure to maintain high standards may not only erode the financial health of insurance companies but also lower the capacity of companies to underwrite bigger risks as well as impede the development of innovative products,” she noted.

She also indicated that the emerging oil and gas industry requires of players in the industry to consolidate and scale up the insurance industry to be able to mobilise and allocate domestic resources as a step in funding their development agenda.

Brokers play an intermediary role in the insurance industry by matching the needs of their clients with suppliers of insurance and reinsurance and it is done through undertaking a holistic assessment of their client’s risk and insurance needs, recommending the most appropriate insurance policies and sourcing for the most suitable policies among the pool of insurers and reinsurers in the market.

In the domestic insurance market, brokers remain the primary distribution channel as they play a key role in supporting the insurance purchase programmes of corporate institutions and insurers as well a raised overall risk management standards.

The deputy finance minister urged brokers to collaborate effectively to tackle the challenges facing the sector in order to boost the fortunes of the insurance industry to support national economic growth.

She further urged brokers to provide a greater range of innovative and sophisticated advisory and risk management services in the quest to create a robust and diversified domestic financial sector that is responsive to economic needs.

“Brokers must adapt to changes in the new global landscape so as to keep pace with current trends and create a competitive environment for the insurance industry to grow.

“I also encourage GIBA to take full advantage of government policy interventions as well as the several opportunities that exist in the agricultural, manufacturing, real estate, telecommunications and oil and gas sectors,” she advised.

President of the Ghana Insurance Brokers Association (GIBA), Nathan Adu, said the conference was a platform for sector actors to gain the much needed enlightenment about the broking profession and brainstorm to be abreast with new trends in the global broking market.

He particularly stressed on the need for superior service delivery and relationship management with customers: “As brokers, we should understand that customers are the very reason we are in business; and we must therefore do everything to make them satisfied.

“We should be innovative and adopt policies which suit the respective needs of clients instead of the straight jacket one-fit-all policies we are used to.”

Mr. Adu further urged continuous flow of communication between brokers and customers in a way that brokers will not be seen as people only interested in collecting premiums.

“As we prepare to share ideas and develop strategies to effectively operate our business, it is worth mentioning that we need to be mindful of enhancing our relationship with all stakeholders in the industry.

“In that regard, we assure the industry regulator, NIC, of our continuous support of your programmes and policies towards the development of the industry,” he noted.

The GIBA boss also called for stronger collaboration with sister association Ghana Insurers Association (GIA) in the cause of working harmoniously for a vibrant and productive industry.

A recent research by Ernst & Young on seven African countries published by the Commercial Risk Europe magazine revealed that the country has the potential to grow its insurance industry by 8.5 percent by 2018.

This is expected to grow premium income from the current US$400 million to US$600 million within the same period, and according to Mr. Adu, until industry players act together, all of that will be a dream.

President of the Ghana Insurers Association (GIA), in his solidarity message, applauded the leadership of GIBA for their visionary and ideologies that has seen the association grow from strength to strength.

He said the theme for the conference reiterates the commitment of GIBA towards promoting best practice among the insurance broking fraternity.

He added: “This is an ideal we as direct insurers very much share in and we pledge to support the leadership and members of GIBA towards the realisation of an effective, highly professional and ethical broking practice in the country.”