Miss Lydia Lariba Bawa, the Commissioner of the National Insurance Commission, has urged insurance industry players to adopt the use of mass market channels to increase access to their products, especially from the informal sector.
She said the Mobile Network Operators had proved to be an appropriate and reliable channel for the distribution of micro-insurance products.
These arrangements had helped to reach relatively large numbers of customers within a short time-frame, Ms Bawa said at the launch of Micro-insurance Awareness Campaign report, in Accra.
The report, sponsored by the German Development Cooperation (GIZ) in collaboration with the National Insurance Commission (NIC), and the Ghana Insurance Association (GIA), is to identify the impact of education measures on changing insurance knowledge and attitude in low-income communities across Ghana.
She said such innovative technology partnerships not only provided new delivery channels and open up access to the low-income population in remote areas, but also bore promising potentials to solve financial transaction challenges in the payment of premiums by customers and in the disbursement of claims for the customers’ convenience.
“As an industry, another area that we want to pay critical attention to, is our approach to public education on insurance … we need to revisit the collaborative and coordinated approach by the NIC, the Ghana Insurance Association and Ghana Insurance brokers Association in carrying out public educational campaigns on insurance,” she stated.
Miss Bawa said the development of the micro-insurance sector in Ghana had continued to be a major priority of the NIC to increase the understanding and patronage of insurance services.
She noted that the major consumer protection concern arising from the low-income Market had to do with delays in claims payment by insurance companies.
She, therefore, urged insurance and brokerage companies to make good use of the lessons learnt from the awareness campaign in fashioning out and providing excellent customer service.
This, she said, should include having in place well-published and effective claims handling processes and complaints handling procedures.
Mr Torsten Schlink, the Head of Programme, GIZ-PSED, said better insurance knowledge and improved attitudes towards insurance, coupled with innovative and demand-oriented products would lead to sustainable growth in insurance coverage.
He said since 2013, the insurance industry had seen growth, especially in the uptake of micro-insurance.
“From 1.7 million lives/properties covered in 2011, the Micro-insurance Landscape Study conducted in 2014 indicated that we have moved to about 7.5 million lives/properties covered,” he said.
“This shows a growth in the percentage of population covered, from seven per cent to 28 per cent, representing 300 per cent in four years”.
That growth, he said, was as a result of the mobile technology, dedication of both the regulator and GIA as well as the partnership with the GIZ to increase consumer education, as other aspects of insurance business development were also being attended to.
“With these gains that have been made, it is obvious that development in the insurance industry needs both a demand and supply approach,” he said.
“For without well-informed consumers who know what risk they need to cover, which products best serve these needs, who understand the products they are buying…know what is expected of them and what to expect from the insurance companies, new and innovative products will not serve the purpose of enhancing financial inclusion and an increased insurance penetration,” he said..
“Hence, it is time for the entire industry to come on board to comprehensively act on educating the public so as to ensure increased insurance uptake,” he said.
“As GIZ, we are ready to support impactful initiatives by the industry through our work with NIV and GIA,” he added.
In a speech read for him, Mr Ivan Avereyireh, the President of GIA, said industry players’ inability to effectively communicate benefits of their products to their various target markets continued to be a challenge.
He said this lack of effective communication contributed significantly to the unfortunate negative public image and perception of the industry.
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