INSURANCE PRICING AND PROFIT SETTING IN GHANA
The National Insurance Commission (NIC) Insurance Act 2006 (Act 724) that was re- enacted by the Parliament is an act to renew or revise the law relating mostly to insurance so that they may be able to provide and regulate the most comprehensive by laws to the insurance agency. The classes of business in Non Life Insurance identified are Accident, Aviation, Fire, Vehicle Insurance and General Liability while life insurance are classified as Universal life, Group life, Endowment, Terms, Funeral Insurances and the likes are included in NIC Act 724. This re enactment will provide opportunity not just to the insurance agency but mostly it will benefit the subscriber, group or individually. (http://www.nicgh.org/live/images/photos/downloads/Insurance_Act_724_2006.pdf)
The patronage of insurance in the country of Ghana has been gaining respect and popularity in the recent years thereby growth in their industry. Insurance companies in Ghana, like Ghanalife, Prime Insurance, Donewell etc. has been experiencing a good business engagement and they have been attracting more than subscriber but also investors that boost their reputation and their revenue because of the many benefits they can give to their customers and their future. Insurance from life and non life can easily persuade their customers to purchase and try their products for education, pension, accidents, calamity and safety of their family.
The insurance practice is getting better in Ghana. But this is not always the case the development of NIC Act 724 will provide answers to the most recent problems that the customers and competitions have found to be discouraging, because there are instances that profitability problems sets-in. Insurance agencies and marketers should understand that there should be a fair pricing law and profitability that they need to follow to ensure fair practices and competition among different agencies. There are some insurance agencies that provide price undercutting which is somehow illegal when situation like offering customers for a price of Gh¢20 is an industry standard while some insurance will offer half a price of Gh¢10 in order to gain more subscription.
Prime Insurance Company has experience such cases according to Ebenezer Allotey their managing director. This kind of pricing strategy is not possible as of today because of the regular onsite inspection that has been included if there are insurance agencies that will perform such practices they will be held liable and their licenses will be invalid, appropriate sanction will also be enforced against them. Another issue is the delayed claim will be regulated; claimants and beneficiary will be subject for interview they should present documentation support so that the government will be the one to back them up if such insurance agency will not honor their claim.
Fraudulent claims from clients will not be honored and they will be subject to investigation while fraudulent insurance agencies will be subject for regulatory confirmation that they should not use bureaucratic and long winding procedures in giving their claims and through this, the claim procedures will be both beneficial to the plan holder and to the representing agency in providing a better and honest services. The profit and the pricing should be simplified and included in the insurance procedures and practices to inform their client upon subscription and it should be made clear within the terms and conditions they are offering from the very start of their subscription.
The clients should be assured that they are provided with comprehensive and transparent policies in pricing so that this will not create confusion upon the maturity of their insurance and claims. Ghana Insurers Association (GIA) has also call on the participation of the media to educate the general public about the pricing and profit settings in the development of insurance awareness. Insurance holder can also enjoy other products because they can enjoy the loan benefits in some forms of insurance like for example in Donewell Life Insurance and according to one of their marketing representative Akwasi Boakye that this has been included in the National Pensions Act (766) and it is made mandatory in a three-tier pension plan contributory scheme.
The main objective of the three tiers is to secure that plan holder will receive retirement income security or workers if the plan has been paid in full or if the maturity of such plan sets in. Particularly in the first tier benefit that they can receive is the social security scheme benefits is given mandatory for all employees whether for private and public companies. The second tier benefit that they can have has been designed to give a higher lump sum for employees. The third tier benefit would be is a voluntary provident fund and personal pension scheme, employees can also make voluntary contribution so they can increase or decrease their preference according to their capacity to pay. Usually insurance coverage is made by voluntary contributions of employers and employee according to the law of Ghana, Accra President John Atta Mills that retirees and plan holder should now be optimistic because of the implementation of such law that will protect their people.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment