ENCOURAGING IMPACTFUL FINANCIAL PROTECTION
NATIONAL INSURANCE COMMISSION GHANA
Justice Ofori, Commissioner
2 | Africa Outlook issue 81
FINANCE
Inspiring insurance confidence in the face of COVID-19 Ghana’s National Insurance Commission (NIC) is changing the negative perceptions around indemnity, ensuring providers are delivering meaningfully reliable services to policyholders and helping to develop a sense of trust as the underlying mission of every insurance entity in claims payment Writer: Jonathan Dyble | Project Manager: Sam Love The Ghanaian insurance landscape has become more exciting as there is a new wind of change regarding our approach to the regulation, supervision and general operational standards of industry players. “We are making insurance a matter of importance to people rather than a matter of compulsion, and have gathered adequate momentum in our exponential drive to achieving an improved insurance penetration rate. We are poised to stop at nothing with the resolve to ensuring that we make greater inroads within the insurance space.” It’s been 18 months since I last spoke with Justice Ofori, Commissioner of Insurance at Ghana’s insurance regulatory body, and it’s refreshing to say a lot has changed for the better over the period. The country’s insurance industry has experienced what can only be described as a drastic transformation, Ofori hinting to recent strides and achievements chalked up by the Commission in collaboration with other key stakeholders. “We have created and continue to improve on an environment where insurance companies no longer
compete on pricing but on the quality of their services, which is remarkable,” he states. “We’ve been promoting a sound system, thus shaping the needed element of insurance – trust!” Trust is everything when it comes to the financial services sector; it has to be earned and nurtured, and having recognised this NIC, is tirelessly pursuing an endless list of impactful initiatives that are helping to both improve industry performance and change public perceptions about insurance. First, it recently announced a new, more flexible minimum capital requirement for all insurance companies – a move that has allowed industry players to improve their focus on and at the same time prioritise policyholders’ interests. “We’ve done this by providing an adequate period within which regulated entities are expected to meet the minimum requirements with less stress,” Ofori states. “It is instructive to note that there seem to be quite a number of insurance companies who are unable to live up to expectations by way of efficiency and effectiveness, and this has been dealt with, instilling the much needed confidence in insurance.” Africa Outlook issue 81 | 3
NATIONAL INSURANCE COMMISSION GHANA TAKING STRIDES What is also worthy of note is that the minimum capital requirement strategic announcement is just one of 10 transformational endeavours on NIC’s agenda. The Motor Insurance Database (MID) is a second such initiative. Designed to substantially improve the national understanding of Ghana’s motor insurance market, it has greatly helped all stakeholders to better analyse policies and authenticities with the view to minimising fraud,
particularly motoring insurance which forms over 40 percent of the portfolio of non-life underwriting companies. “The introduction of MID in January 2020 was a huge leap for most non-life insurance companies and intermediaries,” the Commissioner comments. “Though it’s still in its early days yet, the interim statistics have shown a significant reduction in premium rate undercutting as well as minimising the menace of fake insurance,” the Commissioner he adds, striking a positive note about the future.
LEADERSHIP FOCUS
JUSTICE OFORI Mr Justice Ofori holds an International Executive Masters in Business Administration (MBA) and a Bachelor of Arts degree from the University of Ghana, his major being Political Science. He is a Fellow of the Chartered Insurance Institute of Ghana (CIIG) and a Chartered Insurance Professional of the Insurance Institute of Canada (CIP). Ofori’s career in Insurance spans a period of about two decades having held managerial roles within the insurance space both locally and internationally. Prior to his current role as Commissioner of the NIC, he was the first Director of Ghana’s Premier Insurance Training Institution, the Ghana Insurance College having trained about 300 insurance practitioners who have attained the ACII status of the CII of the United Kingdom. With a wide range of experience in both teaching with remarkable pedagogical and managerial skills, it came as no surprise when he rose to the high office of the Commissioner of Insurance and has since been on top of issues, benchmarking global industry best practices.
OLD MUTUAL Digital innovation through the use of WhatsApp Over the years, digital penetration has grown with most Ghanaians leveraging on the availability of platforms such as WhatsApp as their main channel of communication. This presents an opportunity for all players in the financial industry. In response to this, Old Mutual Life Assurance Ghana, a leader in the insurance industry, introduced a ground-breaking and first of its kind distribution channel to the Ghanaian market – WhatsApp. The product, JustCover, was launched in December 2019, and the solution allows customers to buy and pay for local inter-city travel insurance on WhatsApp. The second phase of this innovation is to introduce international travel on the same WhatsApp platform – this will provide accidental emergency cover for international travellers up to €300,000. At Old Mutual, we believe the use of technology is a vital part of the future of insurance and we are excited that Old Mutual Ghana is showing the way, not only in Ghana or Africa, but across the world. To purchase your insurance cover through WhatsApp, simply save the number 0242426455, send “hi” to the number on WhatsApp, answer a few questions and you are covered. In effect, we are using the technology of WhatsApp to provide ‘on-demand’ pay as you go insurance that is anytime and anywhere. This innovative service is unique to Old Mutual and we are proud to be able to offer it to all our stakeholders.
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NATIONAL INSURANCE COMMISSION GHANA The development of a supervision manual for anti-money laundering, the deliverance of risk-based supervision legislation and implementation of the International Public Sector Accounting Standards (IPSAS), with the NIC having been one of the few state agencies to have implemented this globally ahead of the set deadline, are all additional ways in which the organisation has been improving international best practices worth emulating by other state agencies. Further, the NIC has targeted the training of 10,000 insurance sales agents, having already trained over 2,000 as of December 2019. The Commission, through the Ghana Insurance College, is also upskilling the existing insurance sales agents in ethics and sound standard practices so that they will be credible ambassadors as opposed to the hitherto propagators of mis-selling that can occur. It is instructive to note that this is helping to grow the industry as well
GES-NIC Introduction of Basic Insurance in 2nd Cycle Institutions
as revamping its reputation. Ofori explains: “We’re working assiduously on the new insurance bill to help the growth of the industry, bridge the gap in legislation and bolster international best practices in the Ghanaian insurance market. These include compulsory group life insurance, workmen’s compensation, professional indemnity, marine, commercial buildings and public liability insurances, among others. “The Agricultural Insurance Policy has also been drafted and submitted to the government for consideration with the aid of the Alliance for Green Revolution in Africa (AGRA). This bill will provide a comprehensive regulatory framework on which a more structured regime will be hinged.”
KEK Insurance Brokers Ltd. KEK Insurance Brokers Ltd is an indigenous broking firm with substantial links, head-quartered in Accra, Ghana with subsidiaries in Sierra Leone and Liberia. The company was registered as an Insurance broking firm in 1985, became market leaders in 1990 and has consistently maintained this lead on the basis of market share for 28 years and is still leading. OUR AREAS OF OPERATIONS • General insurance broking • Life insurance broking • Reinsurance broking • Claims administration • Risk management services • Consultancy services
A SHIFTING MINDSET The outcome of all these efforts and others has been a rise in awareness, and with that awareness has come significant progress.
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StarLife StarLife Assurance is a wholly Ghanaian-owned life insurance company and the third largest in Ghana. As an award-winning company, with a passion for helping people identify the most secured wealth creation opportunities, we offer innovative life insurance products tailored to meet the unique market segments of the insuring public. We pride ourselves on restoring people after life’s eventualities. With an enviable record of claims payment and presence in all regional and district capitals of Ghana, we continue to deliver value-added products and excellent service to our customers.
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6 | Africa Outlook issue 81
FINANCE
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Africa Outlook issue 81 | 7
NATIONAL INSURANCE COMMISSION GHANA Ofori himself points to the life sector as one that picked up markedly, revealing that the informal sector, which accounts for over 80 percent of Ghana’s working population, is one that has particularly come to value the real benefits of insurance in general. “Professionals in the informal sector, like market traders and artisans, have benefitted from the support of the German Development Corporation (GIZ) through micro and small-scale business clinics, which has engendered trust through the simplicity of language,” Ofori affirms. “When there is awareness, needs are created, and as needs are created, actions of patronage fall in line thus culminating in the growth of the sector.” The digitalisation of insurance has also been wholly embraced by the local population, MID standing as a prime such example, and early movers in the market have made significant gains, generating an exponential increase in gross premiums in the first
two months after implementation. “The MID has become more userfriendly as every motorist, driver, passenger or pedestrian with any type of mobile phone has the ability to check the authenticity of any vehicle,” Ofori adds. Crucial to the success of each of these initiatives have been those organisations working in harmony with the NIC towards a common goal. It has cultivated close relationships with the Driver and Vehicle Licensing Authority (DVLA), the Ghana National Fire Service (GNFS) and the Motor Traffic and Transport Department (MTTD) of the Ghana Police Service, each of these organisations helping to uphold the NIC’s mission of increasing public confidence in insurance in diverse ways. Indeed, in the eyes of the Commissioner, these collaborations and others are not just crucial but also formidable pillars on which a solid insurance industry can be built.
Donewell Insurance DICL has been offering general insurance services for the past 27 years in Ghana and has the clear objective of being your insurer of choice with respect to personal and commercial lines. Our core values of Integrity, professionalism and stewardship are built around solid structures to ensure our policyholders get unbiased firstrate services. Our insurance solutions are hinged on prompt payment of claims, financial strength and our appetite for risk is unmatched supported by world class reinsurers. We value relationships with all our stakeholders and live by our slogan... “If it must be done, it must be Donewell.”
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GLICO Group With a promise to cushion its customers for life, GLICO LIFE is poised to deliver value to all its stakeholders. The company’s goal therefore is to meet customer expectations through a transformed digital experience. It believes that digitalisation is an effective way to achieve greater customer satisfaction in today’s technologically advancing business world. The use of technology in its business operations has therefore not only enhanced GLICO LIFE’s customer experience, but has improved and strengthened its relations with all its stakeholders.
Justice Ofori speaks on the digitisation of insurance
8 | Africa Outlook issue 81
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Africa Outlook issue 81 | 9
NATIONAL INSURANCE COMMISSION GHANA
The NIC is working tirelessly to ensure trust in insurance is regained “The NIC is also partnering with the Ghana Education Service (GES) in order to provide basic insurance education in second cycle institutions with a youth-focussed approach, the launch of which took place in January 2020,” he adds. “Our relationships with donor agencies such as GIZ and AGRA similarly continue to yield the needed results.”
PURPOSED TO PROTECT Without question, the work of NIC in partnership with each of these entities has begun to turn the tide on poor practices in Ghanaian insurance and also create awareness in the remotest parts of the country using empirical research results. Regulated entities no longer have any choice but to fine tune their operations and ultimately deliver meaningful services to policyholders, thus developing the long-needed sense of trust and rising demand in the process. The Training of Trainers (ToT) 10 | Africa Outlook issue 81
seminars for Officers of the Police MTTD have commenced in earnest to ensure a successful enforcement of the MID in all 16 Regions of the Nation. And the NIC itself has never been in a better position to make greater progress, as its footprint now spans seven geographical regions owing to a recent decentralisation policy of its supervision and regulatory mandates, resulting in the establishment of three additional offices in Koforidua, Cape Coast and the Sunyani areas, bringing the number outside Accra to seven. “We’re no longer operating on a basis of ‘long-talk’ from Accra anymore,” Ofori states. “These offices are a fully-fledged part of NIC’s functions and deliver on supervision, regulation and take complaints and compensation issues very seriously as we draw closer to policyholders and prospective ones.” Likewise, it has also established a research Unit in order to better assess industry performance, undertaking
various empirical and market research programmes with the view to further increasing the overall penetration rate. Indeed, this is the organisation’s ultimate ambition moving forward. In the next year, it hopes to have created a 70 percent digitised national insurance system with marine cargo and hull insurance digitisation in the offing, awareness rates nearing 90 percent, and a more financially agile industry that will enhance confidence in insurance among members of the general public. Why? Well, for Ofori, it comes down to the simple fact that insurance is the best way to protect finances, lives and businesses. “The poor need insurance to protect the little they have and continue living as comfortably as possible, as do the rich,” he affirms. “It is risky to deceive ourselves into thinking that insurance premiums are high, rather than being motivated by the relief that will be there in the event of mishaps.
FINANCE
ABOUT THE NIC The National Insurance Commission was established under Insurance Law 1989 (PNDC Law 227) and now operates under Insurance Act 2006 (Act 724). The objective of the Commission is to ensure the effective administration, supervision, regulation and control of insurance businesses in Ghana. NIC is mandated to perform a wide spectrum of functions including licensing of entities, setting of standards and facilitating the setting of codes for practitioners. The Commission is also mandated to approve rates of insurance premiums and commissions, provide a bureau for the resolution of complaints and arbitrate insurance claims when disputes arise. Other responsibilities include the provision of recommendation to the sector Minister for policy formulation, supervision of practitioners, enforcement of compliance and public education. The development of strong relationships with regulators from other countries and international bodies such as the International Association of Insurance Supervisors (IAIS) and ensuring the conformity of practitioners to internationally accepted standards are also under its umbrella. The enactment of Act 724 was a major milestone in the development of a robust insurance regulatory environment, empowering and granting adequate powers to the Commission. Together with several other initiatives in the past decade, this law and in turn the Commission provide a strong regulatory framework for Ghana’s insurance industry. VISION: To be a model insurance services regulator in Africa. MISSION: To be an effective custodian of public interests, ensuring financial soundness of insurance companies and prompt attention to grievances of policyholders and interested third parties. To act as the catalyst for the development, robust growth and prosperity of Ghana’s insurance industry. CORE VALUES: Integrity, transparency, accountability, responsiveness, accessibility, innovation.
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Vice-President of the Republic of Ghana, Alhaji Dr Mahamudu Bawumia, unveiling a new digitisation of insurance initiative
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0302 208 877 “If one perceives insurance as being expensive, then we should begin to think of the fact that there is a reason we leave our house doors locked before going to sleep, even if we’ve never experienced a break-in before. “The global COVID-19 pandemic is the perfect example of why insurance is important. It’s crucial that we take the necessary safety precautions, washing our hands and using alcohol-based sanitisers to curb its spread, but for those affected by it and falling upon poor health or hardships, insurance can be there to help pick up the pieces.”
NATIONAL INSURANCE COMMISSION GHANA Tel: +233 302 238300 / 238301 info@nicgh.org www.nicgh.org
Africa Outlook issue 81 | 11
NATIONAL INSURANCE COMMISSION GHANA Appiah-Ampofo House, P.O. Box CT 3456, Cantonments-Accra Tel: +233 302 238300 / 238301 info@nicgh.org www.nicgh.org
PRODUCED BY AFRICA OUTLOOK MAGAZINE