The National Insurance Commission (NIC) has taken steps to tackle the growing trend of underwriting losses recorded by insurance firms in recent years.
Acting Commissioner, Michael Andoh, says, building an efficient system to reduce underwriting losses has become imperative due to the decline in investment income as a result of the recent Domestic Debt Exchange Pogramme (DDEP).
The Acting Commissioner made these remarks at the 2023 International Conference on Inclusive Insurance held in Ghana.
“These streams of income which is largely derived from revenue accrued from invested premiums gathered in investment instruments such as bonds and other medium to long-term instruments were badly affected by the DDEP”, he explained.
“A lot of the insurance companies tend to be making underwriting losses and have been depending on investment income to break even and make a profit”, he added.
According to the Acting Commissioner, the effects of the DDEP have necessitated stringent strategic measures on the part of the Ministry of Finance and the National Insurance Commission to ensure a robust insurance ecosystem.
“So if you listen to the minister [Ken Ofori-Atta], the whole idea is to get into a lower interest rate regime. This means we may not be able to continuously rely on investment income and so we are taking some strategic approach to addressing those losses by improving efficiency.”
He furthered that the regulator together with the Ministry of Finance will provide financial assistance to cushion insurance firms badly affected by the recent economic shocks.
The 19th edition of the International Conference on Inclusive Insurance was organised by Munich Re Foundation and the Microinsurance Network with the National Insurance Commission of Ghana, the Ghana Insurers Association and the Insurance Brokers’ Association of Ghana as local hosts.
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