The Deputy Commissioner of the National Insurance Commission, Mr. Simon Davor has told citifmonline that insurance companies are reluctant to insure goods of traders in the informal sector due to the disorganized nature of Ghanaian markets.
Between 2010 and 2014, fire outbreaks in markets across the country destroyed goods and properties worth over 19 million Ghana cedis— most of them uninsured.
Mr. Davor explained that insurance companies, even though take on risks, are measured in taking risks that are insurable.
“The problem we have is that most of the fires are occurring in the markets and our insurance companies have a reason for not insuring the people in the markets because those markets are not designed to make them insurable”, he stressed.
Presently, insurance penetration as a percentage of GDP is below two percent, but Mr. Davor insisted that insurance companies will not take the risk until Ghanaian markets are reconstructed with access routes clearly laid out.
He disclosed that the Commission has contacted the Ministry of Local Government and Rural Development to include fire hydrants in their market designs to forestall a complete destruction of markets during fire outbreaks.
Even though about 13 insurance companies in Ghana have developed 28 micro-insurance products for SMEs in the informal sector, the Deputy Commissioner stated that insurance companies are still attracted, largely by the formal sector.
“Currently the universal companies only attract the formal sector”, he pointed out, adding that the Insurance Commission is keen on bringing on board the informal sector.
He maintained that despite the low penetration of insurance companies in the financial sector, the future looks bright as banks in Ghana partner insurance companies to sell innovative products to the general public.
By: Lawrence Segbefia/citibusinessnews.com/Ghana