GCR sees potential for higher capital and cash balances and enhanced earnings capacity to strengthen the financial profile, given developing risk-based solvency management initiatives.Over the long term, we expect to see improved underwriting capacity across the short-term insurance industry,potentially supporting higher industry growth rates and insurance penetration. On the other hand, the effects of the coronavirus (“COVID-19”) pandemic and low oil prices could undermine the National Insurance Commission’s (“NIC”) efforts in the short term.
The spread of COVID-19 has significantly slowed global economic activity and resulted in high levels of uncertainty regarding its impact. The drop in global oil prices will affect Ghana’s oil revenues and government fiscal headroom. This will have negative economy-wide impact, including the insurance sector. Thus, initiatives by the NIC to increase local insures’ participation in the insurance of oil and gas may be undermined by subdued growth and demand