The Managing Director of Ghana Reinsurance Company, George Mensah has described as crucial the recapitalization of insurance companies in the country.
According to him insurance companies will continue to lose out in providing insurance in sectors such as oil and gas if their capital is not strengthened.
The Commissioner of the National Insurance Commission (NIC), Justice Yaw Ofori earlier this year announced that insurance companies would undergo recapitalization although an amount has not been disclosed yet.
Speaking to Citi Business News on the matter, Mr. Mensah was of the view that a strong recapitalization of insurance companies will strengthen the sector.
“There’s so much hard currency that leaves the shores of the country because the are certain risks that the insurance industry is not able to underwrite because of the capitalization”.
He added that with a strong capital insurance companies can take up bigger risks in the oil and gas sector, “ The oil and gas industry where about ninety eight percent of the premium generated goes out of the country and that is primarily because we don’t have the financial muscle to underwrite the risk. Your capacity has a relationship with the stated capital and for that matter the more we beef up our capital the more we can keep and then keep the premium otherwise it seems as if the insurance industry and the brokers only see the businesses outside of the country and the premiums go outside of the country”
He spoke to Citi Business News at the sidelines of the company’s annual donation to selected institutions in which a total of ten institutions were awarded with twenty five thousand cedis each to help in their operations.
The institutions include;
College of Health Sciences (Accra), School of Medical Sciences (Kumasi), Department of Child Health, Korle Bu Teaching Hospital, Accident Centre, Korle Bu Teaching Hospital.
Others are, Urology (GU) Department, Korle Bu Teaching Hospital, University of Ghana Students Finacial Aid Office, Ghana heart Foundation, Ghana National Trust Fund, OsuChildrens Home and Accra Metroploitan Assembly.