MET Insurance urges support to deal with premium debts
Players in the insurance industry have stated that although the No premium, No Cover (NPNC) policy introduced earlier this year slowed premium production, it supports the move into the future.
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The Chief Executive Officer of MET Insurance, Mr Kwame Gazo-Agbenyadzie, who articulated the views of the industry at the company’s sales executive conference in Accra, said though the implementation of the policy dipped premium production in the first quarter, “it is a good policy that we all have to support and ensure it works.”
The CEO of MET was interacting with the Daily Graphic after presenting plaques and certificates to some of the company’s hardworking sales executives to climax its annual Sales Executives Conference.
This year’s event awarded nine individuals in three categories, with the regular winner, Mr Paschal Dusi, retaining his position as the Overall Best MET2U Relationship Manager. He took home a memento, certificate and a cash award.
The Overall Best MET2U Sales Executive went to Mr Peter Ritchie Korshie Adzogble. Mr Joseph Addai Appiah emerged the Most Promising/Entrepreneurial Sales Executive of the year.
Economy and insurance
Mr Gazo-Agbenyadzie said the year was challenging, as its gross premium as of the third quarter stood at GH¢53.9 million, against a target of GH¢61.8 million. MET Insurance expects to gross GH¢65.7 million premium income by the close of the year.
The sticky economic fundamentals, he said, had impacted business operations which were producing at low capacity, with some of them collapsing, thus limiting the stock of assets to insure, adding, “When people don’t make enough money, they cannot insure.”
MET Insurance has a unique sales proposition where independent sales force, known as MET2U, contribute about 30 per cent to the company’s gross premium income by sending insurance to the doorsteps of clients.
This year, the sales force’s contributions to total gross premium income dipped to GH¢14.1 million or 27.2 per cent as of the third quarter, compared to the 32.4 per cent or GH¢17 million they contributed in the same period last year.
“This was due to several factors including the No Premium, No Cover policy which got people initially skeptical. However, we pushed, so they either reduced their insurance cover or went for shorter periods,” the CEO explained.
He urged the sales force to continue to exhibit a high level of loyalty, professionalism and integrity, adding that very soon the issue of premium debtors would be a thing of the past.
No premium, no cover
The NIC earlier this year introduced a policy that barred insurance companies from selling on credit.
Under the directives, insurance companies which failed to comply were required to pay penalties up to 10 times the value of the premium they had offered as credit premium. A few insurance companies were fined.
Insurance companies are also required to pay reinsurance on premiums received in 48 hours to enable the reinsurance companies also to take up retrocessions, a third layer of insurance where re-insurers also cede some of their risks to another party.
The policy became necessary because of the stiff competition within the insurance industry, which resulted in some companies using all means such as providing credit for insurance premiums.
Over time, the credit lines turned into huge outstanding debts that threatened the survival of some of the insurance companies.
As of June last year, for instance, premium debtors stood at GH¢930 million, a situation that the regulator feared could cripple the industry’s liquidity and eventual survival.
Resource person
A guest speaker at the conference, Dr Michael Agyekum Addo, told the sales force that success depended on three pillars – attitude, skills and knowledge –, explaining that whatever was acquired in school (knowledge) constituted only 15 per cent of success; 25 per cent was for skills in whatever endeavour, with the 60 per cent being on attitude.
"Ghana can offer you a lot if you work well, if your attitude is good. We don't see anything good in Ghana because of our attitude, which is coming out of our mindset," the industrialist who owns the Kama Group of Companies stressed.