This means that GH¢22.3 billion representing 94 per cent of the imports were either not insured at all or were insured by foreign firms, a practice which is against the Insurance Act.

It also denies insurance companies the needed premium income necessary for financing long-term investment.

This came to light at the opening of the two-day Marine Insurance Training by the Insurance Brokers Association of Ghana (IBAG) in Accra on October 13.

Low participation

The Commissioner of the National Insurance Commission (NIC), Dr Justice Ofori, in a speech read on his behalf, stated that the participation of the insurance sector had been extremely low, as only six per cent of all cargo that was imported into the country was insured locally.

He explained that there has always been a provision in the insurance Act that requires all imports into the country, with the exception of personal effects, to be insured with a local insurer.

“But this is yet to substantially impact our industry, simply because goods are usually imported on cost, insurance and freight (CIF) instead of cost and freight as prescribed by section 222 of the insurance Act, 2021 to the detriment of the local market,” he said.

He said available records indicate that along with a high value of imports/exports, significant investments have also been made in infrastructure development for the shipping industry.

Size and nature

Also, the commissioner said some importers believe the size and nature of the country’s market render it uncompetitive and ineffective in underwriting cargo insurance.

“But all that is about to change and this training could therefore not have come at a better time.”

“With the support of the Marine Protocol, Marine and Aviation Insurance Database (MAID), and more importantly your expertise, the future looks promising,” he said.

The speech was read by the Head of Reinsurance at the National Insurance Commission (NIC), Esther Armah.

Periodic education

The President of the Ghana Insurers Association, Seth Aklasi, said there should be periodic education to inform people, especially importers on the need for local marine insurance.

“With the significant benefit of having to buy insurance from Ghana where you can walk to any insurance firm to put in a claim is very crucial because you are being protected.”

“The law also stipulates that a person shall not enter into a contract of insurance with an offshore insurer in respect of property situated in the country, liabilities arising in the country or goods, other than personal effects, being imported into the country,” he said.

He added that there was the need to protect the interest of local insurers.

Marine insurance training

The President of IBAG, Shaibu Ali, noted that the marine insurance training sought to position members of the IBAG to take advantage of the Insurance Act.

He said marine insurance had always been compulsory in the country even with the previous law Act 74, but the punishment was just a fine.

“And so, importers were taking advantage and were paying only the fine when caught but now the new law introduces a new regime which combines both a fine and prison term of up to three years.”

“This will push the recalcitrant importers to insure their goods locally. So, once this is done, we expect a lot of activities on the marine front and for that reason we need to position our members, staff and stakeholders to be able to educate the public,” he added.