Hidden insurance conditions are stifling insurance penetration - NIC

The insurance industry of the country has continually refused to reach expected projections for some years now.

The industry currently contributes less than 1.5 percent of the Gross Domestic Product(GDP) of the country.

However, Nigeria and Kenya are said to have insurance penetration of about 3.0 percent, which is twice as much as Ghana’s penetration rate.

Some Ghanaians have attributed this underperformance to the lack of understanding of insurance policies and clarity generally tagged as ‘hidden conditions’.

According to the National Insurance Commission (NIC), the perception of hidden conditions is greatly hurting the reputation of insurance companies as they are perceived as cheats who conceal these conditions to forfeit payment of claims.

Victims in the past have complained bitterly about the wrongful deductions they have suffered at the hands of insurance companies who promised rosy policies but failed to deliver.

“The insurance marketer came to me and explained their terms of conditions but later on it turned out not to be so. I saw some wrongful deductions and I drew their attention to it,” a victim who had suffered such fate narrated

The Commissioner of the NIC, Lydia Lariba Bawa told Accra-based Citi FM that the commission is impressing on insurance companies to desist from the act.

“At the beginning, let the client understand what he or she is buying before the person signs the policy. We should not wait for the customer to bring a claim and we tell them it is not covered. Let them understand and make a decision that yes, this is what I want, and at the time of claim make it simpler for them,” she stressed.

Madam Bawa narrated how some companies have used such hidden conditions to decline payments to individuals who have signed on to policies.

"The way forward is for insurance companies to open up to explain all conditions to avoid any ambiguities" she recommended.

She stated that Ghana is yet to fully benefit from pooling funds for onward lending although insurance companies are known to be avenues in the financial sector to provide that.

She also argued that a good insurance industry helps channel funds in the financial sector to create liquidity for private investors to access.

Hidden insurance conditions are stifling insurance penetration - NIC

The insurance industry of the country has continually refused to reach expected projections for some years now.

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