7.5m policyholders to be affected by Debt Exchange Programme – CIIG President
More than 7.5 million policyholders will be affected by the Domestic Debt Exchange Programme (DDEP) says the newly inducted president of the Chartered Insurance Institute of Ghana (CIIG), Solomon Lartey.
Speaking to norvanreports on the sidelines of the Investiture Ceremony of the Governing Council of the CIIG, Mr Lartey averred insurance firms will default on payment of daily claims worth GHS 4.5m to policyholders.
This, he noted, is due to the fact that over 40% of funds of the insurance industry is invested in government securities.
Adding that, the DDEP will greatly affect public confidence in the insurance industry and further lead to the decline in penetration rate of insurance in the country.
According to the Ghana Insurance Association (GIA), aside affecting claims payment of insurance firms, the DDEP if applied to investments of the industry, will further compound underwriting losses made by insurance firms.
Per the GIA, insurance firms in the country made total underwriting losses of GHS 356m in the third quarter of 2022 alone.
“Since the industry is making underwriting losses overall, it means that insurance companies rely on investment income to meet their claim obligations to policy holders.
“Therefore, any debt exchange programme will negatively affect our ability to pay claims and lead to asset-liability mismatch.
“Taking into consideration the fact that insurance companies are making underwriting losses, the effect of the debt exchange programme will be so devastating that there will not be an insurance industry after we surmount the economic challenges,” said the GIA.
CIIG outdoors new Governing Council
A new Governing Council of the CIIG have been outdoored.
The Investiture Ceremony of the Governing Council held on Friday, January 19, 2023, saw Solomon Lartey inaugurated as the new President of the CIIG.
Delivering his first address as the President of CIIG, Mr Lartey called on the regulator, the National Insurance Commission (NIC) to help grow the CIIG to become autonomous and self-regulated.
“Sustenance of CIIG is based on self-regulations with the creation of the insurance regulations and rules. The CIIG will exert itself as an authority in the insurance space and set itself as a place of knowledge and excellent risk management through the passage of the CIIG Bill,” he remarked.
Also speaking at the Investiture Ceremony was Commissioner of Insurance, Professor Dr. Justice Ofori, who averred the success or failure of the insurance industry relies on the strength of insurance professionals and associations like the CIIG.
“Strong professional associations like the CIIG engenders trust in insurance among the populace, the CIIG can be strengthened by putting place advancements that will strengthen its capacity to deliver on its mandate,” he added.
