Former GIA President calls for imposition of GH¢1m penalty on insurance undercutting

Ivan Abubakar Avereyireh, former President of the Ghana Insurers Association (GIA), has proposed a GH¢1 million penalty. This measure aims to reduce undercutting in the insurance industry.

Undercutting occurs when an insurance company offers lower premiums than competitors. Mr. Avereyireh stated this practice is widespread and needs immediate action.

He spoke at the 2025 Ghana Insurance Summit in Tema. He noted that the current penalty of 5000 units, or GH¢60,000, is not enough. Many companies can pay this without their boards knowing.

The summit gathered industry players and stakeholders nationwide. The theme was “Upholding High Ethical Practices: Tracking Undercutting for Long Term Sustainability.”

Mr. Avereyireh urged the National Insurance Commission (NIC) to increase penalties. He also called for amendments to the Insurance Act, 2021 (Act 1061).

He suggested that after punishing companies, individuals responsible should also be penalized. The Chartered Insurance Institute of Ghana (CIIG) should remove offenders from their records.

He emphasized that undercutting harms the economy and weakens insurance companies. This could lead to failures in paying claims during unfortunate events.

Mr. Avereyireh encouraged sector players to adopt innovations and technology like artificial intelligence (AI). He stressed the importance of ethical practices and charging appropriate premiums.

Dr. Abiba Zakariah, Acting Commissioner of NIC, supported stricter enforcement against offenders. She acknowledged public demand for lasting solutions while emphasizing ongoing discussions about these issues.

She mentioned that tougher sanctions might be necessary but highlighted that punishment should extend beyond fines. Additionally, she suggested implementing fit and proper tests for industry professionals to ensure ethical conduct.