Stop premium undercutting to sustain industry -Commissioner of Insurance

The Acting Commissioner of Insurance, Mr Michael K. Andoh, has advised players in the insurance industry to desist from “premium undercutting” to help sustain the insurance industry.

Premium undercutting is defined as the practice where an insurance company offers clients “unrealis­tically low premiums” in order to gain a competitive advantage.

According to him, premium un­dercutting remained a challenge to the insurance industry and denied it of the necessary funds to develop.

Mr Andoh gave the advice in Accra yesterday during a day’s sem­inar organised by the West Africa Chartered Property Underwriter (CPCU) Society Chapter.

The West Africa CPCU Soci­ety Chapter, an affiliate of The Institutes’ CPCU Society, an international organisation with the headquarters in USA, has the ob­jective to promote ethical standards in insurance.

Mr Andoh, who chaired the programme, said premium under­cutting was against the ethics and standards of the insurance industry.

Though the Acting Commis­sioner of Insurance could not give figures on how much undercutting costs the insurance industry, he said it was one of the reasons some of the insurance companies recorded losses.

The Acting Commissioner said the seminar would discuss tech­nology, new trends, challenges and opportunities in the insurance industry.

He said the low insurance penetration in the country was as a result of the low adoption of technology and the failure on the part of some insurance practi­tioners to go by the standards of the profession.

The Global President of CPCU Society, Traci Adedeji, in her re­marks, said the CPCU Society was established 80 years ago to pro­mote professionalism and ethical standards in the insurance industry.

She said the Ghana chapter was established in October last year to promote the insurance industry in the country.

Ms Adedeji entreated practi­tioners in the insurance industry to build trust, pointing out that trust was crucial for development of the insurance industry.

She entreated insurance prac­titioners to put the needs of the customers above their interest.

The Senior Director, Analyst Gartner Inc, USA, Rajesh Narayan, in his remarks, urged players in the insurance industry to embrace technology.

He said technology was not to displace them of their jobs, but to aid them to become efficient and reach more customers.

Justice Peprah Agyei, West Afri­ca CPCU Society Chapter Interim President, in his address, said the association was to elevate insurance practice in the sub-region.

He said the association was also to facilitate network and promote innovation in the insurance indus­try.


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