Insurance companies urged to stop premium undercutting to sustain industry

The Acting Commissioner of Insurance, Mr. Michael K. Andoh, has emphasized the importance of integrity within the insurance sector, urging industry players to refrain from engaging in premium undercutting.

Speaking at a seminar organized by the West Africa Chartered Property Underwriter (CPCU) Society Chapter in Accra, Mr. Andoh highlighted that premium undercutting poses a significant challenge to the insurance industry, depriving it of essential funds for development. 

He stressed that such practices are contrary to the ethical standards of the profession.

Premium undercutting is a practice where insurance companies offer clients unrealistically low premiums to gain a competitive edge.

While Mr. Andoh did not provide specific figures on the extent of the problem, he noted that undercutting contributes to financial losses for some insurance companies.

The seminar, chaired by Mr. Andoh, focused on discussing technological advancements, emerging trends, challenges, and opportunities within the insurance sector. 

He attributed the low insurance penetration in the country to inadequate technology adoption and the failure of some practitioners to adhere to professional standards.

On her part, Traci Adedeji, the Global President of the CPCU Society, underscored the organization's commitment to promoting professionalism and ethical conduct in the insurance industry.

 She highlighted the recent establishment of the Ghana chapter as a means to bolster the insurance sector in the country. 

Madam Adedeji further emphasized the importance of building trust with customers and prioritizing their needs above personal interests.

A senior director and analyst at Gartner Inc., USA, Rajesh Narayan,  encouraged insurance players to embrace technology as a tool for enhancing efficiency and expanding their reach to more customers.

Also, the Interim President of the West Africa CPCU Society Chapter, Justice Peprah Agyei,  outlined the association's objectives, including the elevation of insurance practice in the sub-region, fostering networking opportunities, and promoting innovation within the industry.