Insurance companies urged to meet minimum capital requirement

The Commissioner of Insurance, Ms Lydia Lariba Bawa, has encouraged all insurance companies in the country to take steps to meet the new capital and solvency requirements in order to spare the industry from going through another liquidation process.

She said the new requirements, which will take effect from January 2016, would help avoid premium flights, thereby keeping the premiums in the country for development.

Ms Bawa said this in a speech read on her behalf by the Deputy Insurance Commissioner, Mr Simon Gavor, at the 10th anniversary launch and rebranding of Starlife Assurance Company in Accra.

Capital inadequacy in the insurance industry has resulted in low premium retentions and high demand for overseas reinsurances, leading to excessive premium flight, which runs into millions of Ghana cedis every year.

Although the Insurance ACT, 2006 (ACT 724) requires all insurance companies to exhaust available local capacity before recourse to overseas reinsurance, insurance businesses still end up overseas due to the lack of capital.

In 2013, out of a total non-life premiums of GH¢583 million, only GH¢204 million was reinsured, and less than that number was reinsured locally.

Ms Bawa said the new framework was, therefore, meant to improve the capacity to retain the premiums in the country.

The new solvency framework requires all insurance and reinsurance companies to revise their minimum capital to GH¢15 million by December 31, 2015.

They are also required to comply with the target Capital Adequacy Ratio of at least 130 per cent by December 31, 2015, 140 per cent by June 30, 2016, and 150 per cent by December 31, 2016.

Launch of 10th anniversary and rebranding
Starlife Assurance, a life assurance company which was incorporated in compliance with the new Insurance Law 2006, ACT 724, in October 2005, has launched its 10th anniversary on the theme: “A Decade of Impacting Lives.”

Speaking at the launch, the Managing Director of Starlife Ghana, Mr George Kojo Addison, said the real life for Starlife had just begun for all stakeholders, as it unveiled a new corporate image intended to bring more verve, excitement and satisfaction.

“The real life we are referring to from today is the ‘purple life’. As a company, the significant landmark of today’s event is just not about celebrating 10 years, but about making life insurance a way of life in the next decade,” he stated.

He said the ‘purple life’ was expected to create a new way of life for its customers, employees and all stakeholders.

The Board Chairman of Starlife Assurance, Mr Frank Oppong Yeboah, also added that the company’s share had been growing steadily from seven per cent in 2006 to 12 per cent in 2014.

He said its total assets as at 2014 stood at GH¢203.64 million, from GH¢7.98 million in 2006.
Premium income has also been growing, on the average, at 40 per cent from 2006.

Starlife also currently provides life insurance solutions for over 500,000 lives and employs a total of over 700 staff, including sales executives.

Mr Oppong Yeboah said that was an indication that the last 10 years had provided a solid foundation for it to leapfrog into the next decade with confidence.

The Chief Executive Officer of Legacy and Legacy, Rev. Albert Ocran, who was chairman for the occasion, advised insurance companies to provide life insurance education for the general public, since insurance education in the country is very low.

He commended Starlife for its tremendous achievements over the past 10 years and stated that there was still more to be done.