She said the financial services sector’s contribution to the country’s Gross Domestic Product (GDP) currently stood at about eight per cent with insurance accounting for about two per cent, explaining that the life insurance sector’s contribution to the two per cent was a mere 0.8 per cent, also an indication of extremely low level of life insurance penetration.

While this may look discouraging, Ms Bawa, who is also the Chief Executive Officer of the National Insurance Commission (NIC), said the flip side of the coin showed that there was a great potential for the development and marketing of life insurance and that required that companies dedicated resources to exploit the potential.

Speaking at the launch of two new high end insurance products by Enterprise Life in Accra, the insurance commissioner said, “to tap this great potential however requires hard work and dedicated efforts in specific areas. Insurance companies need to be adequately capitalised to enable them write and retain significant levels of premiums, acquire basic operational, distribution and back office infrastructure, and optimize economies of scale.”

She added, “effective governance and risk management systems must be deployed to enable the companies minimise the effect of the environmental and operational risks that tend to militate against their profitability.”

The insurance industry, she said, must continue to innovate to find suitable and cost effective distribution channels that will help reach the underserved segments of the market.

“Perhaps our biggest opportunity lies in the fair treatment of our customers. Since we sell promises, we must assume a posture that instills trust and confidence in our customers by assuring them that in their rimes of need, we will be there on time to support them. As I have said before, a promptly paid claim is the best form of insurance education anybody can give or have,” she said.

Improving insurance penetration

The NIC, she said, was doing its part in helping to improve the insurance penetration in the country and because people will only buy what they understand and appreciate; the NIC was taking steps to improve insurance education.

“In collaboration with the German Development Cooperation (GIZ) and the market trade associations, the Insurance Awareness Coordinators Group has been set up. The group has developed an insurance education strategy which is currently under implementation,” she said.

She said the NIC in collaboration with GIZ has also conducted a study into mobile insurance and is currently implementing the recommendations of the report.

“This will involve effective collaboration with the National Communications Authority and the Bank of Ghana in the supervision of mobile insurance and the development of the mobile insurance Market Conduct Rules, a draft of which will soon be discussed with the industry,” she said.

Enterprise product launch

Enterprise Life introduced the Enterprise Living Plus Plan and the Enterprise Executive Plus Plan, targeted at high end executives.

The Enterprise Living Plus Plan is a one-stop life insurance solution designed to meet both the death and survival needs of the middle class, while the Enterprise Executive Plus Plan is targeted at the executive market.

The products were developed after detailed and extensive research on what constitutes value for the high end market and it is to give an opportunity for “bread winners” in that market segment to sustain the standard of living of their families when the misfortunes of life occurred.