There is no doubt that the life insurance industry plays a very strong role in the mibilisation of long-term funds for any nation’s economic development.
The country’s life insurance industry has gone through a lot of reforms since the roll out of the new legislative Insurance Act, 724, brought an end to composite insurance operations as it separated the operation of life insurance business from non-life.
Per the new regulation, an insurance company could run both life and nonlife businesses but the two entities should be operated and managed separately from each other.
Between 2008 when most life insurance companies sprung out as solely managed entities, that sub-sector of the insurance business has seen some significant growth looking at the balance of players in bracket.
The 22 life insurance companies operating in the country commanded a total of GH¢859.4 million in gross premiums and an industry profit after tax of GH¢92.3 million in the year 2016. These figures represent a surge of 21.8 percent and 215.2 percent over the 2015 numbers for both industry gross premium and after tax profit respectively.
Five companies were the biggest contributors and earners to this impressively, they include: Enterprise Life Assurance with GH¢235,311,894 in gross premium; SIC Life Company Limited with GH¢212,960,892; STAR Life Assurance with GH¢105,620,200; GLICO Life Insurance with GH¢82,733,000; and Prudential Life with GH¢33,814,009.
Another trend that gives a strong indication of growth in the budding life insurance sector could be seen in the area of total assets of the various players.
Data available to the B&FT shows that total assets of the life industry, which stood at GH¢1.8 billion in 2015 has leaped to GH¢2.3 billion in the year under review a growth of 28.3 percent.
Almost all the players, with the exception of Capital Express and Esich Life, recorded an improvement over their previous year’s figures, with Enterprise Life once again showing its strong hold of the industry as it grew its total assets by 26 percent to GH¢481.7 million.
Even though the life industry saw an impressive profit growth, majority of insurers saw an underwriting loss which means that technically, they did not make any profit from their underwritings.
Only two companies Enterprise Life Assurance and GN Life recorded underwriting profits of GH¢1,479,943 and GH¢99,703 respectively, thus, leaving the industry with an underwriting loss of 1 percent to close the year 2016.
In terms of market share, the dominance of Enterprise Life Assurance was better expressed by its strong hold of the life business with its commanding 26.8 percent.
SIC Life followed closely with 24.3 percent, while Star Life and GLICO Life both command market shares of 12 percent and 9 percent respectively.
The industry share of the remaining companies hover around one, two and three percent respectively, even though they were in the growth figures.
Going by the figures, it is evident that the life insurance sector holds huge prospect for growth if that aspect of the insurance practice is properly operated and regulated.