Deputy Minister of Finance has reiterated government’s support for the National Insurance Commission (NIC) in its quest to recapitalize the insurance industry through increasing of the minimum capital requirements.
Kweku Kwarteng said the sector plays a key role in the financial services sector hence the need for a strong foundation to deliver on its mandate.
He was speaking at the JoyBusiness Financial Services Forum on Tuesday in Accra with a focus on the insurance sector.
The forum is on the theme: Recapitalising to grow; a panacea for expansion, penetration and big business underwriting?
The Commissioner-General of the National Insurance Commission Justice Yaw Ofori said “Actually, something is going to come out but I cannot be very specific in terms of amount and the time but it will be sooner than later.”
He added, “We want to take into account the effect on the market because we don’t want to close down any insurance company. We have a lot of local insurers in the market and we want to come out with a package that is going to be accommodating.”
According to the Oxford Business Group 2018 Report, the Ghanaian insurance industry has experienced a decade of rapid growth, and the proliferation of private companies and brokers.
Government’s efforts to strengthen the financial sector and new leadership at the NIC contributed to the rising optimism in late 2017.
The regulator and the government are aiming to increase insurance penetration to 10% of GDP.
The growth of new business lines such as bancassurance, micro-insurance and mobile insurance should help bring this target within reach, although there is still a lot of progress to be made.
The insurance industry is likely to recapitalize, with stated capital jumping by about 233 %, according to the industry regulator, the National Insurance Commission, NIC.
The plan is for the stated capital of life and non-life insurers to increase from the present GH¢15 million to GH¢50 million.
The capitals of reinsurance companies would also go up from the GH¢40 million to GH¢125 million (212% increase) while that of insurance brokers would move to GH¢500,000, presenting a 66.7 per cent increase from the present GH¢300,000.