A first class rated insurance industry can attract the needed Foreign Direct Investment (FDI) that the country requires to develop, Solomon Lartey, Managing Director of Activa International Insurance has said.
The country’s insurance sector, if well developed, he said, could boost investor confidence and accelerate rapid economic development.
“Every serious investor needs adequate guarantees to ensure that their investments are protected and that they can have them back as easily as possible.
Investors want protection for their money that they are bringing in, and one way of protecting that money is insurance. So if the investor is guaranteed that he can get first class rated insurance companies to protect his risk; he wouldn’t hesitate. But if he cannot get that kind of insurance, then, he would go to a country where there is that kind of insurance,” he said.
Mr. Lartey, who was speaking at the sixth edition of the Ghana Economic Forum, further stated that it is imperative for stakeholders to deliberately take major steps in repositioning the insurance sector to contribute more meaningfully to the transformation of the financial industry.
“Even though the contribution of insurance to GDP is less than two percent, the potential that insurance possesses in building the economy of Ghana cannot be over-emphasised. Insurance companies must therefore be seen as partners in the development agenda.
Government through regulation must create the enabling environment to ensure that local insurers build adequate capacity financial and technical capacity to enable them play their expected role in the development of the economy of Ghana 60 years on,” he said.
He further argues that insurance should be added to academic curricular to enable Ghanaians to appreciate the importance of the sector and its contribution to individual and business security.
Mr. Lartey, whose organisation is one of the leading insurance companies on the continent, is of the view that the sector could also be used as a tool for protecting natural resources, promoting technology and innovation, as well as financial inclusion, particularly through micro-insurance.
Although, the National Insurance Commission is providing the right vision and leadership for the sector to contribute more to national development, he explained that it was high time consolidation was taken serious to create giant insurance companies, capable of underwriting big-ticket businesses.
s“Our insurance companies are small but if we consolidate, they will be able to generate the funds needed to support our development. The bigger they are, the more resources they would have, which means that they can cover a lot of premiums, which can be used to do great things,” he added.