The National Insurance Commissioner, Ms Lydia Lariba Bawa, has stated that the introduction of the “no premium, no cover” has brought changes to the insurance industry by enhancing the cash flow positions of insurers.
Considering the fact that businesses inflow had slowed down, Ms Bawa said she was certain that the situation would improve further over time to totally change the face of the insurance industry.
Ms Bawa was speaking at the Ghana Re-insurance Company 5th Cedants Awards Night in Accra last Friday.
From April 1, 2014, the National Insurance Commission (NIC) began implementing the “no premium, no cover” policy, which requires insurance firms to collect premiums upfront before providing insurance cover.
This implies that insurance companies no longer sold insurance products on credit to customers.
Fourteen awards were presented to local insurance companies at the event, which was celebrated on the theme “No premium, no cover: A key to the financial health of the insurance industry.”
The companies were honoured for their efforts and support for the growth of the Ghana Re-insurance Company for the 2013 financial year.
The insurance companies which received awards are the Ghana Union Assurance, Metropolitan Insurance Company, Enterprise Insurance, Nsia, State Insurance Corporation (SIC) and the Provident Insurance Company.
The companies received plaques, certificates and cash prizes of between $2,000 and $10,000 to be used to train and enhance the capacity of their staff.
Ghana Union Assurance Life Company received four awards. Metropolitan Insurance Company won three, while the Enterprise Insurance Company, Nsia and SIC, were honoured with two awards each. Provident Insurance Company received one award.
Ms Bawa advised intermediaries who had decided to introduce credit terms in their operations by paying premiums upfront for their clients to desist from the practice, since one of the objectives for introducing the “no premium no cover” policy was to reduce the credit risk to insurers.
She further urged insurers to find innovative ways of remaining competitive, and adopt prudent capital and liquidity management for better operational results, as well as train their staff to remain technically proficient.
She commended the Ghana Re-insurance Company for its initiative to appreciate its clients for their efforts towards improving the company.
The Managing Director of Ghana Re-insurance, Mr Gustav Siale, commended the National Insurance Commission (NIC) for introducing the “no premium, no cover” to improve the cash flow of all stakeholders in the industry.
Acknowledging that the new directive had its own disadvantages, Mr Siale said he was optimistic that the directive would in the long run improve the financial health of the industry. He congratulated the winners their contribution to the growth of the company.
