Services Of Insurance Brokers Cheaper Than Dealing With Companies -GIBA

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The umbrella organization of insurance brokers, the Ghana Insurance Brokers Association (GIBA), the agents for the various insurance companies operating in the country has served notice that their services are cheaper than insurance consumers dealing directly with the insurance companies contrary to the long held believe that their services are expensive.

GIBA, is an association with the national trade license organizations with a membership of 61 advocate organizations for insurance consumers.
According to the Association, even though they play the role of lawyers as well as advocate in the industry their charges are paid by the insurance companies and not the insurance consumers.

The association explained that it is the work of the broker to look for consumers for the insurance companies and because the brokers know the
terrain and better understands the insurance language their services are not charged on the premiums paid by the insured.

“Our charges are paid on the commissions of the insurance companies and not the premiums paid by the insured.

It is the job of the insurance broker to look for jobs for the insurance companies and companies which do not engage the services of the broker,
have to engage the services of in –house agents who are paid at the end every month”.

Speaking at the maiden sensitization programme of the association with the media in Accra; President of the association, Nathan Adu, said it was relatively cheaper to engage brokers, than keeping in-house agents.

He said in keeping in-house agents means that their salaries among other overhead costs like the payment of allowances and Social Security and National Insurance Trust contributions have to be paid.

He noted that the commission rate of the insurance broker is based on agreed commission rates approved by the National Insurance Commission, the
regulator.

He further stated that whether insurance consumers use the broker or not they still have to pay premium to the insurance companies.

But with the broker it is only the commission that is paid to the broker per the number of clients made available to the company.
According to him, it is the mandate of brokers to provide clients to the insurance companies and brokers are not some two -by -four way side organizations but large companies owned and run by people with the expertise and drive to provide service to the customer.

‘No good insurance company will speak ill of the insurance broker and some do adding that the situation is so because insurance penetration is low on the Ghanaian market’.

He revealed that Ghana has insurance market penetration of 2 percent while countries like South Africa, Egypt and Morocco have a market penetration of 8 percent.

These countries have high market penetration for insurance policy because pension benefits, health insurance among others are all added onto insurance policies but here pension benefits are different from insurance policies held by clients he said.

He said Ghana is the only country that when people get their first job they jubilate and in case of any eventuality like dismissal, death among others then family people start gnashing their teeth because there are no proper insurance policies to sustain people in time of trouble.

He gave the assurance that it is the vision of the association to change the status quo in the urging a lot more Ghanaians to take up insurance policies.

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