President John Dramani Mahama has challenged the insurance industry in Ghana and other parts of West Africa to make their products accessible and affordable to the poor, vulnerable and the large number of people operating in the informal sector.
“The insurance industry would have to complement the government’s efforts in its social security and social intervention programmes. In this way, we would be able to provide relief for the vulnerable segment of our population,” the President said in a speech read on his behalf by a Deputy Minister of Finance, Mrs Mona Helen Quartey, at the 37th Annual General Meeting and educational conference of the West African Insurance Companies Association (WAICA) in Accra.
The President said micro insurance was pivotal in the country’s development process.
“Natural disasters and fire outbreaks often create immediate funding requirements that foreign assistance only address in an ad hoc and often untimely manner. Insurance as a financial tool could significantly improve the swiftness of funds availability and shorten the timeline between the event and the response,” he said.
The event brings together insurance experts to find common ways of addressing and delivering solutions to common problems facing the insurance industry in West Africa.
This year’s event is on the theme: “Africa Rising: Taking the Insurance Industry in West Africa to the Next level of our development.”
The President of the Ghana Insurers Association (GIA), Mr Ivan Avereyireh, also called on insurance companies in the country and other parts of West Africa to develop micro-insurance products to meet the needs of people in the informal sector.
“As an industry, should we look on helplessly when our people, especially those within the low-income population and informal sectors of our economy, are hit by such disasters and we are unable to respond to ease the financial consequences of such disasters?”
With the Ebola virus disease causing a lot of devastation in Guinea, Sierra Leone and Liberia, while fire disasters and perennial floods wreak havoc in Ghana, Mr Avereyireh, who is also the Vice-President of WAICA, said such developments called for the need to save the informal sector from financial losses that came with such disasters.
Adding her voice to the call to design products to meet the needs of the informal sector, the Commissioner of Insurance, Ms Lydia Bawa, observed that until insurance companies found innovative ways of reaching out to the informal sector, it would be extremely difficult for the industry to take insurance to the next level of development.
“The insurance products and services in the WAICA region tend to predominantly focus on the formal sector businesses and white collar workers who usually earn regular incomes and operate bank accounts.
“The irony, however, is that majority of the population in the West Africa sub-region operate in the informal sector. They usually do not earn regular income nor operate bank accounts,” she said.
According to the National Insurance Commission, there are currently 13 insurance companies selling 29 micro insurance products, which currently cover 7.5 million lives and property, compared to 11 companies offering 16 products which cover about 1.7 million lives and property before the implementation of a GIZ initiative aimed at reaching out to the informal sector.
The President of WAICA, Mr Momoh H. Fortune, said as Africa continued to attract investors because of the continent’s impressive growth rates, there was the need to shield West Africa from avoidable public and social health issues, including Ebola that had a telling effect on business in the region in 2014.