Insurers are calling for regulations that would make employers take compulsory life insurance cover for their employees to guarantee the financial security of workers against uncertainties that might suddenly befall them.
The insurance industry said life insurance cover for employees would provide compensation for them in death in the line of duty or permanent disability while working.
At the third national life insurance conference held in Accra yesterday, the insurers highlighted the need for group life insurance as a foundation for economic stability.
It had the theme, ‘group life insurance: a relevant tool for income security for the family, industrial harmony and socio-economic development’.
Policy makers
Speaking at the opening of the conference, the Second Vice President and Chairman of the Life Insurance Council, Mr Edward Forkuo Kyei, said insurance penetration in the country was less than two per cent and that insurance density was also porous or highly concentrated in certain circles.
“This compares unfavourably with other African countries with increasing penetration rates such as South Africa, with 15.4 per cent, Namibia with 7.7 per cent, Mauritius with 5.7 and Kenya, 3.4.”
Group life insurance, Mr Forkuo Kyei said, offered very good solutions for countries that had deployed group life as a compulsory employee benefit scheme to safeguard against social catastrophes.
“I believe that the Ghanaian insurance market is a growing one with huge potential for expansion and thus an urgent need for policy makers to perceive insurance as part of the solution to stabilise Ghana’s economic challenges,” he stressed.
Insurance Commission
The Commissioner of Insurance, Ms Lydia Bawa, said the most important element of any organisation was its human resource, and “it, therefore, behoved on all organisations to take pragmatic steps to protect their most important resource.”
The life insurance industry, she said, had seen significant growth since the separation of life business from the non-life in 2007.
She said life insurance premiums had grown at an average annual rate of more than 30 per cent from GH¢187 million in 2010 to GHC580 million in 2014.
“In spite of the above, life insurance in Ghana is nowhere near its full potential. The industry is yet to mobilise long-term domestic resources to fund socio-economic infrastructure development,” she said.
Ms Bawa said, NIC for its part, was planning to upscale public education on insurance in order to ensure that buyers of insurance had a reasonable understanding of the products they bought and also knew what to do or where to go when they had challenges.
Benefits
One of the pioneers of life insurance in Ghana, Mr Kwame Acheampong-Kyei, who is also the executive chairman of GLICO Group, said the promotion of group life insurance presented an opportunity to increase insurance penetration in the country.
“This is because a single employer can purchase a policy cover for a number of employees’’, he said.
He advised insurance companies to be innovative by developing products that would attract the uninsured and not resort to undercutting their competitors by offering low premiums to the already insured.
Sharing the South African experience with captains of the insurance sector, the head of pricing and reinsurance at MMI International, South Africa, Ms Brice Salence, explained that group life provided social safety nets for the poor.
She said even though group life insurance was not compulsory in South Africa it was highly patronised as a result of the enormous benefits it offered.
Source: Graphic