Member of Parliament for Abuakwa South, Dr Kingsley Agyemang, is calling on the government to introduce emergency relief measures for insurance companies following the devastating June 29 floods that killed several people and destroyed property in parts of Accra and other communities.
According to the insurance expert, the industry is under significant pressure as claims from the disaster continue to rise.
In an interview, Dr Agyemang urged the government to immediately suspend the recently introduced VAT on non-motor insurance products and consider tax reliefs for insurance firms.
“There must be a waiver or suspension of the VAT on insurance products. That will definitely increase the uptake of insurance services,” he said.
He warned that the flood-related claims could severely affect the profitability of insurance companies and ultimately weaken the sector.
“My appeal to government is that there should also be some form of corporate tax waiver for insurance companies. If these companies go out of business, the adverse impact on the economy will be huge. Employment will be affected, future disasters will become more difficult to manage and insurance penetration will decline further,” he added.
Dr Agyemang, who has spent more than two decades in the insurance industry, described the current situation as a turbulent period for insurers.
“We are estimating claims at almost GH¢500 million. That is going to balloon every insurance company’s claims record. It is a very turbulent time in the insurance sector,” he said.
Despite the challenges, he expressed confidence in the resilience of the industry.
The Abuakwa South MP argued that the floods merely exposed a long-standing weakness in Ghana’s insurance sector.
“We didn’t need the floods to expose this. Ghana’s insurance penetration is only about one per cent of GDP, compared to the African average of three per cent and the global average of about six per cent,” he noted.
According to him, low insurance uptake leaves households and businesses highly vulnerable to disasters.
“Insurance is one of the key mitigating tools in times of crisis. No one is immune to disasters. You could lose your home, your vehicle or even your life. That is why we must take insurance seriously as a country,” he said.
Beyond insurance reforms, Dr Agyemang renewed his call for the establishment of a statutory National Disaster Risk Management Fund to support victims and finance disaster prevention and response efforts.
“I have persistently called for a disaster risk management regime for this country. We don’t have one. That is why we often look helpless in times of disaster. If we leave insurance firms alone to deal with these events, they could become overwhelmed,” he stated.
His comments come as government steps up efforts to respond to the aftermath of the June 29 floods.
President John Mahama, at a meeting of the National Security Council, said government was doing everything possible to reduce the impact of flooding, stressing that while floods can be managed, they cannot be completely eliminated because they are natural disasters.
Government has since set up a Post-Flood Mitigation Task Force to coordinate relief efforts and announced a two-day nationwide clean-up exercise aimed at desilting drains and preventing further flooding as the rainy season continues.
