The Ghana Insurers Association (GIA) has called on the government to exempt insurance companies from the domestic debt exchange.
That, it said, was because in uncertain times like this, entities must protect their assets through insurance which is a key risk management tool.
Speaking at press conference last Friday, in Accra, the president of the GIA, Seth Aklasi, noted that out of the total assets of GH¢11.53 billion of insurance companies, which comprised of non-life and life insurance companies, they paid GH¢4.6 billion which translated to 40 per cent, into the securities of the government.
“This means if there is domestic debt exchange, quite a sizeable amount of insurers' assets will be gone and insurance companies will be highly challenged,” he emphasised
Mr Aklasi further stated that anything short of an exemption would have far reaching consequences for the insurance industry and the important role they play in protecting assets and liabilities of the country.
“This will also discourage the citizenry from taking up life and annuity policies,” he added.
According to him, insurance had been identified as one of the important tools for increasing financial inclusion from the current 58 to 75 per cent by 2023.
Mr Aklasi, therefore, urged the government to take actions that reposed confidence in insurance.
“This is important to help formalise the informal sector which constitutes over 80 per cent of the Ghanaian workforce,” he added.
Mr Aklasi also appealed to the government to pay accrued interest on government bonds to insurance companies to enable them pay claims that had already crystallised.
Similarly, he called on the government to release funds of insurance companies that got locked up during the banking sector clean up in order to improve liquidity.
“Finally, some insurance companies have their funds locked up in banks and other institutions which were part of the banking clean up.
Government should ensure release of these funds to the insurance companies concerned,” Mr Aklasi