The Chartered Insurance Institute of Ghana, an umbrella organisation of insurance professionals in Ghana, is pushing for unified norms and regulations for insurance businesses as a way to maximize the benefits of the African Continental Free Trade Agreement (AfCFTA).
According to the institute, the pact's differing capital requirements for member nations might make it difficult for insurers to trade favorably.
Tawiah Ben-Ahmed, President of the CIIG, addressed at a conference on the AfCFTA, Threats and Opportunities for the Ghanaian Insurance Industry.
According to him, the insurance industry in Ghana, as well as in Anglophone West Africa as a whole, is fragmented.
"The capital requirements of Ghana and Nigeria are not the same. As a result, reducing obstacles and facilitating free commerce among African countries necessitates standardization and harmonization of laws and regulations," he explained.
Increased intra-African trade (BIAT)
Meanwhile, the primary speaker at the CIIG event, Louis Yaw Afful, Group Executive Director of the AfCFTA Policy Network, stated that everything that is required to increase intra-African trade cannot be realized without the insurance industry.
"There is a need for infrastructure development in increasing intra-African trade, which in BIAT talks about financial and trade-related infrastructure," he stated.
"How are the items going when they're produced?" Mr. Afful said. We need infrastructure, and these massive investors who want to take advantage of the AfCFTA potential will want to invest, and these investors will want insurance packages for their actions under the agreement."
Capacity for underwriting
The National Insurance Commission's (NIC) Deputy Commissioner of Insurance, Michael Kofi Andoh, voiced concern about the average size of insurance businesses expected to trade under the treaty.
"The insurance sector in Ghana is quite modest, whereas Kenya's generates more than $1 billion in yearly revenue. "South Africa makes billions, but we only make between 600 and 700 million dollars," he noted.
"If you consider the average size of our firms, they are not as huge as you would find in Kenya or South Africa," Mr. Andoh continued. Concerns regarding corporations tied to insurers in their nations were also highlighted by the Deputy Insurance Commissioner.
According to him, these multinationals have a tendency to have their original insurers continue to underwrite their plans under the contract.
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