President of Association speaking to the press
The Ghana Insurers Association (GIA) has asked to be exempted from the governments Domestic Exchange Programme currently being undertaken as part of the International Monetary Fund (IMF) Bailout.
The programme, is asking bondholders to exchange existing domestic bonds with new ones which will mature in 2027, 2029, 2032, and 2037.
Speaking to the press on Friday, GIA President, Seth Aklasi, stated that insurance companies have invested higher proportions of policyholders’ funds into securities explaining that taking away those funds will affect them gravely as the planned cash flow of insurance companies to policyholders will slow down and eventually put them out of business.
“According to data from the National Insurance Commission, insurance companies invested over GHS 1.5 billion in terms of deposits with licensed banks and money market mutual funds.
Considering the fact that these banks and fund management companies have also invested in the government securities, the debt exchange will further compound the investment base of the insurance industry, since 40 per cent of our investments are directly exposed to the government securities. An additional 10 per cent exposure from the licensed banks and fund managers will further worsen our situation,” he explained.
The association further asked that funds of some insurance companies, currently locked up due to the banking sector cleanup that occurred in 2017, be released to the affected companies to help improve liquidity and that, accrued interests on the government’s bonds should be paid to insurance companies to enable them compensate claims that have already crystallized.
They added that if their issues are resolved, the insurance and reinsurance companies would collaborate with the government to help lessen the country’s economic problems by relinquishing all their claims to the financial stabilization fund.
By Abigail Atinuke Seyram Adeyemi