EXCERPTS FROM THE SPEECH DELIVERED BY SHAIBU ALI ON THE OCCASION OF HIS INVESTITURE AS THE 10TH IBAG PRESIDENT ON THE 27TH OF JANUARY 2022
[On his appointment as the 10th IBAG President…]
I am overwhelmed and humbled at the opportunity to be of service to a group of very experienced insurance practitioners. My team and I do not take this lightly, and to that effect, we want to say thank you for the confidence reposed in us. On behalf of my Council, I want to indicate that we accept the opportunity and challenge to be of service to IBAG and we promise to put our best foot forward.
We want to thank all the past Presidents of IBAG for their contributions that has brought the Association this far. I want to specifically make mention of the last three Presidents under whom myself and my team served in various capacities. Bishop Asante Marfo Ahenkorah, Nat Adu and Mrs. Lena Adu Kofi. Thank you for the respective roles you played in turning IBAG into one of the best industry bodies today. From the foundations laid by your good selves, we see our job cut out for us and we are ready to take on the challenge.
IBAG has over the past three decades laid down solid foundations in policies, institutions, and practices for a very effective running of the Association for the benefit of member firms. Going forward therefore, our objective is to get member firms to maximize the benefits from the foundations laid in the past.
We therefore come into office with a very open mind to do what is best for IBAG.
[Regarding projects his office is to undertake…]
A lot of projects have been initiated by the outgoing council and we pledge to see these projects through to their logical conclusion. Among other things, we intend to do the following:
The establishment of the IBAG Cooperative Credit Union
We intend to establish an IBAG Cooperative Credit Union. This would afford member firms and their staff access to soft loans at very affordable interest rates. This would ultimately be open to other members of the insurance industry. Aside offering loans, this project would also serve as an investment avenue for member firms who can buy shares in the venture. The proceeds from this venture would help sponsor our very ambitious Adamorebe Project which was started by our indefatigable outgoing President Mrs. Lena Adu Kofi.
The feasibility for this project would start immediately after this investiture.
The Adamorebe Project
The development of the IBAG part of the Insurance Village at Adomorebe is a very important project, and we are determined and committed to see it through. The project is ambitious, capital intensive but we shall do everything possible to see to its progress. That is why we need the IBAG Cooperative Credit Union to support financially. We remain eternally grateful to all the institutions and individuals that have supported IBAG on this journey so far.
Now, regarding the digitalization of IBAG…
Insurance Broking has over the years gone through significant changes and can no longer be practiced as was done decades ago. Digitalization is the way to go. But presently, how many of our members are in the position to digitalize their operations. For the few who have digitalized, can we say that we have reaped the benefits of effective digitalization? How many of our member firms are actively on social media? What do we use social media for? How many member firms have relevant and efficient websites? Of what use are these websites? Do we generate business through these sites? How many member firms have mobile apps? These are relevant questions that a broking firm that seeks to succeed must ask.
There is a lot that can be done on social media that would enable us drive penetration into the retail and SMEs space, a market segment which has proven better accessible to most of our members (more accessible than the large corporations and businesses).
Our members are of different sizes and are endowed with different levels of resources. If we are to leave them to digitalize on their own, most of them would never become digitalized, as that would prove too daunting a task to undertake solely.
One institution that has been of help in this digitalization bid has been the GIZ and for that we are extremely grateful. We seek to move further on our collaboration with this institution to achieve even greater heights in the digitization journey.
GRA and Local Government Authorities
IBAG members have had issues with the GRA over their quest for brokers to charge and pay VAT. Many of our members have been wrongly served with very high estimated returns. And such high tax burdens can lead to the closure of such companies.
Insurance premiums are VAT exempt, it is therefore inexplicable why the GRA wants brokers to charge and pay VAT. Insurance brokers in Ghana work for the clients and not insurers, we do not invoice clients, we do not receive premiums in our names. Invoices are issued by insurers and the payment is in their names. We therefore do not understand the bases of the call by the GRA.
We have had interactions with the Authority, with the support of the Commissioner of Insurance. We still do not have a common ground on the way forward, but we will keep engaging them. We however call on the Ministry of Finance to intervene in this impasse. Because should this go through, it would affect penetration of insurance, as many broking firms would be forced to close shop.
Yet another statutory authority, the MMDCs, have come out with a fee charging regime for Operating Licenses which they indicate is a direction from the Ministry of Finance. This fee regime has no regard for the turnover of the broking firm or the paying entity, but rather concentrates on the location of the firm. This means that smaller broking firms located within the jurisdiction of the Metropolitan and Municipal Authorities would be paying higher operating fees than bigger broking firms located within the jurisdiction of District Authorities. This we believe is not only unfair but lacks equity.
We are in talks with the Commissioner of Insurance to help seek audience with the Ministry of Finance for us to sort these issues out.
We are concerned with these developments because the long list of statutory payouts that our members are obliged to make, take away all the income we work for. This kills the initiative and drive in our members to work hard. Insurance brokers in Ghana need support to thrive, but these payouts are fast becoming a demotivator.
Collaborations with other insurance industry bodies
IBAG and GIA have over the years collaborated on several issues to the mutual benefit of the two Associations. We have however gotten to a point in time when this collaboration is needed more than ever before. Fortunately, my brother Seth Aklasi who is taking over the leadership of GIA, Tawiah Ben Ahmed, the President of the CIIG, and myself are more than ready to move this collaboration to the next level.
A key issue that we are yet to find common ground on is the repudiation of claims by insurers with the expiration of driver’s licenses as basis. At a time when we are so much concerned about the penetration of insurance, we should be mindful of some reasons why claims are repudiated. Much as I agree that the driver’s license is a statutory requirement and an important one at that, the expiration of a license on the 1st of January for example, does not mean the driver would have lost his driving experience on the 2nd of January and so any accident that occurs thereafter should be repudiated. At the very least a grace period of a month, two or three could be agreed upon.
The insurance industry is plagued with some undesirable practices; some unethical, some unprofessional. The solution to these problems does not lie with anyone else but us. This collaboration would see us tackling some of these undesirable practices to the benefit of the industry.
Frustrations on Statutory Claims Documentation
Acquiring police and medical reports to support claims has become a nightmare for most claimants. Most member firms therefore have loads of outstanding claims which they cannot process because of a lack of supporting documentation. The main challenge is these claimants are expected to part with money before they are given these statutory documents. Because they cannot afford the sums demanded, they abandon the claims. Such people therefore do not see the need to buy insurance anymore.
This situation has the tendency to impact negatively on the penetration of insurance which we are all striving to achieve.
We would therefore call on the Commissioner of Insurance to use his good office to resolve this development before it gets out of hand.
Commission Sharing with Clients
A very disturbing practice emerged on this market a couple of years ago and it is fast gaining momentum. This is the practice of clients demanding for a share of commission meant for brokers. Some clients also place business directly with insurers and collect the commission that would have gone to a broker. If this practice is not checked, it will have grave consequences for the industry.
We therefore call on the National Insurance Commission (NIC) to help us check this canker before it gets out of hand.
Industry Lobbying Body
In discussions between myself and Seth Aklasi, one thing we both agree on is that this industry needs a strong and well-resourced lobbying body. One that can lobby for the interest of the industry. We remember with regret how the Compulsory Group Life Insurance Policy got removed from the new insurance law, the Insurance Act, 2021 (Act 1061).
We at IBAG have a lobbying body which we shall keep however, we are ready to set a joint lobbying body with the GIA and the CIIG which would be adequately resourced to further the interest of the industry.
Younger Generation IBAG Members
It is time to give the younger generation the needed exposure to enable them take up higher responsibilities in our respective firms. They have the energy and drive but lack experience. We would therefore be putting together the right training programs tailored at their peculiar needs. We call on member firms to support their middle management staff and other promising youthful staff to attend these programs and be given the chance to drive change in their respective companies.
They are the future of the industry and the dynamics have changed, with a lot of staff joining broking firms straight from school as opposed to joining the industry after retirement from mainstream insurance. We must therefore have them in mind in setting our corporate strategies and objectives.
Insurance broking has moved beyond being a local business to an international one. Affiliations and international corresponding relationships are key for our survival. We will therefore endeavour to give member firms exposure to international partners, and this will help them grow their businesses significantly.
Support from Members
While thanking the good people of IBAG for the confidence put in us, I would want to appeal that we do not stop there. We need your support, assistance, criticisms, and everything that would make us succeed. We need you to pay your subscriptions, and on time too. We need you to attend meetings and events. We need you to send us feedback on what we are doing.
I want to thank the Commissioner of Insurance for the support and guidance to the cause of IBAG. It has been one of the best collaborations with the NIC in our time. Like Oliver Twist, we want more, and we shall continue to knock on the Commission’s door. We also want to thank the GIZ for their support; and we look forward to more collaborations with the organisation going forward. We are enormously appreciative of our sister association, the GIA, for its collaboration. It is time to do more. To the CIIG, GIC, WAICA, Brown Card Bureau we say thank you. To our members, you guys are the best.
Thank you very much for reading.
Long Live IBAG!
Long live the insurance industry of Ghana!