EXPAND LIFE INSURANCE TO INFORMAL SECTOR

EXPAND LIFE INSURANCE TO INFORMAL SECTOR
The Minister of Finance and Economic Planning, Dr Kwabena Duffour, has urged life insurance companies to extend their products to the informal sector.
The minister, who was speaking at this year's African insurance organisations conference, said life insurance could not impact meaningfully on the economies of African countries if practitioners did not involve the informal sector, which constituted more than 60 per cent of Africa's productive economy.
The two-day conference is being attended by participants from Ghana, Nigeria, Cameroon, Niger, Senegal and South Africa.
The conference, hosted by the Ghana Insurers Association and the Life Offices Association of Ghana, is on the theme, “Gateway to Africa”.
Dr Duffour said life insurance had been used to mobilise long-term funds for economic development and create job opportunities for the youth in developed countries.
He advised insurance companies to introduce products which would be attractive to the youth, especially at a time when opportunities for formal employment were dwindling.
He said African governments could support the growth and development of life insurance through legislation, noting that experience had shown that jurisdictions that were experiencing tremendous growth rates had enjoyed government support.
He urged insurance companies to recognise the crucial role Information and Communications Technology (ICT) played in life insurance business, especially from marketing to underwriting and from claims to fund administration.
On the Ghanaian economy, the minister said currently inflation had dropped to 18.4 per cent and there was indication that it would continue to slide further, while the value of the cedi was favourable and premium relative to the US dollar.
He also said the Standard Bank Carry Trade rating showed that the cedi was now the most preferred currency out of a basket of 24 emerging economies.
Dr Duffour said the fiscal performance for the first three quarters of the year was encouraging and expressed the hope that the year’s performance target would be achieved.
The Commissioner of Insurance, Ms Josephine Amoah, said it was the belief of many in the business community that the global financial crisis had not had much direct impact on insurance companies in Africa.
However, she said, as a result of financial conglomerates and international active groups which had cross-sectoral and cross-border linkages, Africa could not be said to be immune from the effects of the crisis.
She said African insurers, therefore, needed to learn from the experience of their counterparts in the developed economies and take urgent steps to forestall any failure in their markets.
Ms Amoah was of the view that the ability of insurance companies to withstand the current crisis would depend, to a large extent, on the quality and nature of their assets and types of their products.