![](\"http:\/\/www.ghanamma.com\/wp-content\/uploads\/2022\/09\/Dr-Justice-Ofori3-1024x682.jpeg\")
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Provisional results by the National Insurance Commission indicates that the total capital base for the insurance industry grew by 33.0% to \u00a23.88 billion in 2021, from \u00a22.91 billion in 2020.<\/p>\n
This improved the Capital Adequacy Ratio (CAR) in both the Non-Life and Life sectors of the insurance industry. In 2021, the industry average CAR improved to 456.0% and 524.0% in the Non-Life and Life sectors, respectively.<\/p>\n
The maintenance of CAR above the required 150.0%, the NIC said, will partly depend on the willingness of the insurance industry to stick to and continuously improve on good corporate governance practices.<\/p>\n
Provisional results by the National Insurance Commission indicate that solvency risk continues to be fairly contained, with a positive and stable outlook into the near future.<\/p>\n
Gross premiums increased by 19%<\/strong><\/p>\n Gross premiums also increased by 19.0% in 2021.<\/p>\n Gross premiums stood at \u00a254.70 billion in the review year, compared to \u00a23.95 billion in 2020. Premiums grew on the back of the digitisation drive by NIC.<\/p>\n Return on equity improved significantly<\/strong><\/p>\n In 2021, Return on Equity improved significantly for the Life sector.<\/p>\n In contrast, the Non-Life sector witnessed a slump.<\/p>\n With respect to the Life sector, the increase was propelled by investment income which compensated for the poor underwriting results in the sector.<\/p>\n In the non-Life sector, the slump was partly due to the implementation of the new Minimum Capital Requirements, which pumped up the equity base of most Non-Life insurers, as underwriting and investment returns improved over the period. Broadly, profitability risk remained contained in 2021.<\/p>\n Insurers are therefore expected to build on the recapitalisation exercise to institute efficient and effective cost measures to improve underwriting results in the near to medium term.<\/p>\n Investments grew by 26%<\/strong><\/p>\n Total investment assets grew by 26% to \u00a27.1 billion at year-end 2021 from \u00a25.7 billion at year-end 2020.<\/p>\n Investment assets in the Life sector amounted to \u00a25 4.8 billion compared to \u00a22.8 billion in the Non-Life sector. Both Life and Non-Life sectors maintained the trend of having the concentration of investment assets in fixed income instruments.<\/p>\n For the first time in three years, growth in real estate investments for the Non-Life sector plummeted. On both fronts (Life and Non-Life sectors), investment assets continue to be concentrated in Government of Ghana (GoG) and Bank of Ghana (BoG) securities.<\/p>\n Retention ratio grows<\/strong><\/p>\n The retention ratio continued its ascendancy in 2021 on both fronts (Non-Life and Life sectors).<\/p>\n Whereas Non-Life insurers retained 70.0% of premiums, Life insurers retained 89.0%. The relatively lower retention ratio for non-life insurers, the NIC pointed out, continues to reflect the nature of risks underwritten and the high gross premiums, relative to capital ratio in the industry.<\/p>\n On the other hand, the high retention ratio among Life insurers can be generally attributed to compliance with the NIC\u2019s Reinsurance Guidelines, and specifically to the demand for savings-linked insurance products and the long-term nature of their actuarial liabilities.<\/p>\n In the medium to long-term, it is expected that improved capitalisation will lead to a higher retention ratio in the Non-Life sector while encouraging the underwriting of pure risk insurance products in the Life sector.<\/p>\n The NIC as of December 2021, had approved \u00a2 278 million in respect of overseas reinsurance premium transfers.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Provisional results by the National Insurance Commission indicates that the total capital base for the insurance industry grew by 33.0% to \u00a23.88 billion in 2021, from \u00a22.91 billion in 2020. This improved the Capital Adequacy Ratio (CAR) in both the Non-Life and Life sectors of the insurance industry. In 2021, the industry average CAR improved […]<\/p>\n","protected":false},"author":1,"featured_media":1211110,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[26328,13842,2056,1326,7944,1289],"class_list":["post-1211109","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-3-8bn","tag-base","tag-capital","tag-grows","tag-insurance"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1211109","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1211109"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1211109\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1211109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1211109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1211109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}