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Untapped insurance avenues

BY: Ernest Baffour Awuah
•Insurance
•Insurance

Insurance all over the world has come of age in its simplicity. Insurance has transcended the scope of the cause-and-effect syndrome in contemporary African business and now rearing its head in a new wanton of opportunities both for the insured and the insurer.

Modern Research in insurance premium management has postulated that Insurance companies are the bedrock of every developing economy seeking to reduce debt to Gross Domestic Product (GDP) ratio, bridging the gap between the rich and the poor fiscally and also acting as a sustainable pillar in securing long-term financial goals.

The principle that has always prompted Insurance companies to cough out high amounts of taxes because of their astronomical inflow of profit has thwarted the growth of many of these companies. Most of these companies have either resorted to subscribing to government bonds or investing in “slow to get” returns that actually hamper growth, or to a fair extent, enables most of them to grow at a snail’s pace.

Bedevilled by this phenomenon, I have decided to painstakingly offer a route of possible management strategies or better still, individual and group products that have the potency to not only exacerbate the profit margins as such but also to expand and maintain the stream of income available for long-term plans.

Operations

Operations in the sale of insurance in Ghana are quite conventional, giving multilateral a run for their monies. With the Rambo style of erupting marquee at washing bays, funerals, parties and events to meet high profile clients to one on one prospecting, the centre indeed cannot hold for maximising PROFIT.

First of all, the area of insurance in the agricultural sector has not been fully and strategically tapped. With the nation earning foreign exchange with the exportation of cash crops to demanding countries, one could only fathom why the government becomes the only receiver in this cycle.

Strategically, right from the harvesting point of a crop by a farmer to its final cultivation stage onto the sales market, there is no sale of insurance. If the government can earn foreign exchange from cocoa, cotton, shea butter and banana, among others, vis a vis the former supporting the farmer with seeds, introduction to modern farming technologies and expert advice on pest control even to subsidies, we insurance critical thinkers wonder why insurance cannot be offered as such till time. I guess the boardroom of most insurance companies is limited to the contemporary buying and selling of individual products.

Unlike advanced countries, where self-skilled workers are overwhelmingly insured making their over-reliance on government revenues less trivial or minimal, artisans such as carpenters, mechanics, builders, dressmakers, construction workers and even miners in Ghana and other developing economies are bequeathed with individual products like pension plans, savings and other daily collection of monies, popularly termed as SUSU. Evidently, new entrant insurance companies find haven in this modus operandi in penetrating the market. That notwithstanding, the idea of giving such a group of people a hedge start in life operated on the principle of insurance is very crucial.

Skilled workers aforementioned demand lifetime insurance policies that can, among others, benefit and sustain their livelihood over a given period. In such times, the government’s pro-poor policies cum external benefits are rather ripping off their future interest. A fixed policy that determines the gradual accumulation of premiums over a given period primarily to reimburse a person in the unlikely event of unwarranted working conditions or debt sustainability is worthwhile.

Purpose, developmental insurance

The purpose of insurance for all adage is highly defeated when undoubtedly customers’ savings in deposit-taking institutions such as banks, cooperatives and credit societies are not insured. Investments, pensions and bonds whether local or external miss the insurance radar in Ghana. Government regulations not frowning on such management operations that can be spearheaded by insurance companies leave me thinking-a third point strategy.

Developmental insurance in the construction sector, preferably roads and highways, are not insurance mechanised or untapped. With government upon government increasingly bombarding each other in the speed construction of roads with some worth millions of dollars, the need for insurance can be prudent.

It is quite clear that the visibility of roads and highways are common these days but are not given insurance examination.

In simplicity, insurance has indeed taken a different dimension and as such its unlimited benefits should be tapped.


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