Lydia Lariba, Commissioner of the National Insurance Commission (NIC), has stated that even though the industry’s gross premium income has seen significant growth over the years, profitability has not increased commensurately.
At a cocktail organised by SIC Life for its staff in Accra, the Commissioner said competition in the insurance industry has intensified with the entrance of a few companies.
“Efficiency continues to be low as most companies are very small in size and do not have the needed capital and resources for growth. Even though product innovation and distribution channels have improved significantly, we are still largely unable to reach out to the informal sector.”
She said the National Insurance Commission had taken a number of steps to help the industry overcome the challenges, adding that NIC had embarked on a vigorous consumer education programme to help improve insurance penetration.
Touching on the performance of SIC Life, she said: “In spite of the challenges I have enumerated above, SIC Life appears to be growing from strength to strength.
“The company’s expense ratio continues to be one of the lowest in the industry. The company’s third quarter returns show that profitability has improved almost IOO percent over 2015.”
She further congratulated SIC Life Insurance company Limited on winning the CIMG Insurance Company of the year 2016 (Life Category) award and placing 39th on the Ghana Club 100.
Aaron Issa Anafure, Chief Executive Officer (CEO) of SIC Life, in an address, said 2016 was a relatively challenging year for the company in terms of its technical results.
“In the year under review, the premium income made from the combined Core Life and Sika Plan businesses, as at the end of the 3rd Quarter 2016, was GH¢159,477,002, marginally exceeding the premium income target 0.02 percent. Out of this, Core Life contributed 68 percent while Sika Plan contributed 32 percent.”
He added that since its introduction in November 2003, Sika Plan had remained the market leader in its product category in the Ghanaian insurance industry and the most patronized within the micro-finance sector.
“Compared with 2015, 2016 premium income grew nominally by 18.57 percent. New business for core life grew by 17.54 percent from 22,548 to 26,503 in numbers. The total claim payout for the same period was GH¢107,848,499, representing 67.63 percent of actual premium income. Overall management expenses totaled GH¢28,929,000.00, resulting in an expense ratio of 18.14 percent.
“At end of third quarter of 2016, the company has recorded profit-before-tax of GH¢16,475,190 (un-audited accounts),” he added.