Africa > North Africa > Libya > Lydia Lariba Bawa, Commissioner, National Insurance Commission (NIC)

Libya: Lydia Lariba Bawa, Commissioner, National Insurance Commission (NIC)

2017/01/14

To what extent is consolidation needed in the country’s insurance sector?

LYDIA LARIBA BAWA: In Ghana, there are too a lot of insurance companies relative to the size of the market. With a total market premium of less than $500m, the country has around the same number of insurance companies as Nigeria. The latter has a total premium gain of around $1.8bn. A direct result of the extremely high number of insurance companies is the existence of small, financially constrained and operationally inefficient companies. Unfortunately, these companies erode trust and confidence, as they are unable to pay valid claims. Consolidation in the form of mergers and acquisitions is necessary.

What steps can be taken to better enforce compulsory insurance for commercial properties?

LARIBA BAWA: The NIC, in collaboration with relevant stakeholders such as the Ghana National Fire Service (GNFS), Ghana Police Service and Ghana Insurers Association, has done a lot to enforce compulsory insurance for commercial properties. An inspection team made up of representatives from these four stakeholders monitors compliance through inspections in Accra, Kumasi, Tamale, Tema and Takoradi. Evidence of insurance for developed properties is presently a prerequisite for the acquisition of a fire certificate from the GNFS. Intensifying the degree of inspections in collaboration with various metropolitan, municipal and district assemblies will ensure next compliance, while the prosecution of offenders will aid enforcement.

How far can domestic reinsurance be expanded?

LARIBA BAWA: Currently, most reinsurance activity happens outside of Ghana, which leads to premium flight from the economy. As these transfers are performed in foreign currencies, it leads to the depreciation of the cedi. There is, however, some potential for expanding reinsurance here. Initial, prior to the reinsurance stage, direct companies could share a significant all of business through coinsurance to exhaust the capacity of direct underwriters before recourse to reinsurance. Second, at the reinsurance stage, the capacity of the local reinsurers should as well be exhausted prior to reinsurance outside of Ghana. Still, some of the larger foreign and multinational firms will aim to bypass these requirements and insure and reinsure all their businesses overseas, resulting in the majority substantial challenge to expanding domestic reinsurance.

What are the obstacles to expanding insurance penetration part the broader people?

LARIBA BAWA: Key obstacles include low literacy levels, and thus low insurance awareness; low gain levels; a lack of suitable and efficient distribution channels; a large informal sector that is mostly unbanked with irregular gain patterns; and inadequate actuarial resources to develop appropriate products for the various people segments.

In addressing some of these obstacles, the Insurance Awareness Coordinators Group (GIZ), made up of relevant stakeholders, has developed an Insurance Awareness Strategy, which was implemented in the second half of 2016. The NIC has further collaborated with GIZ, the German development organisation, to design and implement a micro-insurance regime to reach out to low-gain households and the informal sector. Alongside GIZ, the NIC and the industry have developed an Actuarial Capacity Development Strategy, which is currently being implemented. It seeks to steadily increase the supply of locally available actuarial resources over a finite period of time to improve the efficiency and service delivery of the insurance sector. Finally, innovation and technology has spurred mobile money and electronic payment systems, such as e-zwich, for alternative distribution channels.

Related Articles
  • Climate change laws around the world

    2017/05/14 There has been a 20-fold increase in the number of global climate change laws since 1997, according to the most comprehensive database of relevant policy and legislation. The database, produced by the Grantham Research Institute on Climate Change and the Environment and the Sabin Center on Climate Change Law, includes more than 1,200 relevant policies across 164 countries, which account for 95% of global greenhouse gas emissions.
  • North Africa: EU Not Showing 'Political Will' Over Migration Crisis

    2015/08/07 The 28-country European Union has told member states that expressing regret over the new migrant tragedy was no substitute for action. Some 200 migrants were feared drowned at the same time as their vessel sank off the Libyan coast. One NGO helping to save shipwrecked migrants in the Mediterranean Sea is the medical charity Doctors Without Borders. DW has been talking to the chief of their German section, Florian Westphal.
  • Libya Outlook for 2013-17

    2013/10/12 The country (Libya)It has borders with Algeria for 982km, Egypt for 1115km, Niger for 354km, Sudan for 383km, Chad for 1055km and Tunisia for 459km. It is situated in Northern Africa, bordering the Mediterranean Sea, between Egypt and Tunisia. Land in Libya is mostly barren, flat to undulating plains, plateaus, depressions. Libyan land covers an area of 175 9540 km². The climate is Mediterranean along coast; dry, extreme desert interior. Libyan(s) speak Arabic, Italian, English, all are widely understood in the major cities. OVERVIEW Political instability will remain high owing to social unrest across the country, particularly in the long-neglected eastern region. Disagreement between liberal and conservative forces, namely the Muslim Brotherhood, has paralysed the coalition government and left it unable to confront the deteriorating security situation. A full parliamentary election is scheduled to take place a year next a new constitution has been approved in a referendum, but, given that a constitution is from presently on to be drafted, the original
  • President : Mohamed Yousef el-Magariaf

    2012/12/19 Mohamed Yousef el-Magariaf is a Libyan politician who has been President of the General National Congress of Libya since August 2012. In this role, he is Libya's de facto head of state.He is the leader of the National Front Party, which won three seats in the 2012 election, and he was previously well known for having founded and been the first leader of the National Front for the Salvation of Libya against regime of Muammar Gaddafi