Deputy Minister of Finance Kweku Kwarteng 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.
Mr Kwarteng said the sector plays a key role in the financial services sector hence need 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?
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 efforts to strengthen the financial sector and new leadership at the National Insurance Commission, the industry regulator, contributed to 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.