Ghana has recorded its first merger of local insurance companies following the revision of the minimum capital requirement by the National Insurance Commission (NIC).

The companies; Regency Alliance Insurance and NEM Insurance Ghana Limited, have pulled resources together in a bid to meet the new capital requirement for insurance companies.

Under the recapitalization, direct insurance companies are expected to increase their capital to 15 million cedis while Re-Insurance companies are to recapitalize to 40 million cedis.

About 43 companies have so far met the requirement with eight others undertaking various strategies to avert a revocation of their licenses.

Speaking at the official launch of the merger, the Commissioner at the National Insurance Commission, Lydia Lariba Bawa said the move will propel the companies to undertake large risk ventures.

“For our market, there are over 50 companies and we think that is too much for the industry considering the fact that there are even more applications for licenses. We are looking at having a smaller number who possess stronger capacities. So if the companies should come together, they should be able to increase their capacities so they can be able to absorb major risks,” she observed.

For his part, the Managing Director of Regency Nem Insurance, Bode Oseni reiterated the need for insurance companies to re-strategise to increase their capacities and undertake large risk ventures.

According to him, the convergence should culminate in delivering new standards for excellence in the insurance industry.

“I think it’s the right way to go and we are proud of the convergence; we are also satisfied over the fact that it is the first time that local insurance companies are coming together. We would like to work to make the coming together a good success,” Mr. Oseni stressed.

NIC extends recapitalization deadline to end of year

Meanwhile Madam Lariba Bawa has disclosed to Citi Business News the initial September 30th deadline for all insurance companies to review their minimum capital would be extended to the end of the year. According to her, the decision is influenced by the commitment shown by some of the companies to work to meet the new requirement by the Commission.

“We are not in a hurry to liquidate companies because nobody wins in the end so that is why we are giving them more opportunities. It is after the end of year that we will be compelled not to grant any concessions,” the NIC boss stated.