President of the Chartered Insurance Institute of Ghana (CIIG), Solomon Lartey, has said that the removal of non-life insurance from the Value Added Tax exemption list would lead to an increased cost of insurance and adversely affect insurance penetration in Ghana.
This calls for doubling their efforts as insurance professionals to deepen their understanding of insurance generally and the products offered specifically in order to either maintain their current low insurance penetration rate or improve upon it.
He said that the tax on premium insurance will discourage interest from Ghanaians.
According to him, the insurance sector in the country has a low penetration rate, which is less than 2%.
Solomon Lartey expressed his displeasure over the removal of exemptions for non-life insurance products in the country, which will result in a 21.9% Value Added Tax (VAT) on insurance industry.
In an interview with Peace FM News, he said the removal of the exemption for non-life insurance products in the country will affect the insurance industry.
He called for the need to maintain high professional standards and deepen insurance education, which has been heightened by current geopolitical and economic developments both globally and locally.
While Russia-Ukraine seems to have been navigated and relegated to the background, current unrest in the Middle East has also shaken the insurance landscape, throwing various reinsurance and insurance arrangements (like marine coverages) out of balance.
“Since the industry is making underwriting losses, overall, it means that insurance companies rely on investment income to meet their claim obligations to policyholders,” he said.
The CIIG is the mother body of all insurance professionals in the country, which brings together practitioners from life and general insurance, reinsurance, health insurance companies, broking firms, pensions, securities, and trustee firms.
Mr. Lartey is the CIIG’s 9th president. He took over from Mr. Tawiah Ben-Ahmed, CEO of Sanlam Life Ghana.
Source: Prince Baffour Asamoah/Peace FM Newsroom
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