The practice where an insurance company offers clients unrealistically low premiums in order to gain a competitive advantage still persists in the industry.
The phenomenon is said to constantly drain the pool, making it difficult for the insurer to honour claims, some of the time.
Some insurance firms have pointed accusing fingers at brokers for putting them in a tight corner with fears of losing the business to a competitor.
But according to President of IBAG, Shaibu Ali, as much as the broker as per his or her mandate acts as an intermediary between a consumer and an insurance company, helping the former find a policy that best suits their needs, the final verdict lies on the insurance company to consider it a favourable deal or reject same.
“Insurers are the ones who give the quotation; do I come to you with a gun to your head to say quote 1 cedi instead of 5 cedis? No. So how can the broker be blamed for it?” he said.
Mr Ali added, “there’s a problem in the industry and we all need to brace up and solve it.”
The IBAG President also lauded the market regulator, National Insurance Commission for its resolve to apply hefty fines against companies including brokers found culpable.
“Fortunately, the regulator has brought up solutions where they have brought up minimum rates below which no one can go so if an insurance company should quote below that, the company gets fined and I the broker I get fined”, he said.
“So I think that if it is fines that will get us to do the right thing, so be it”, he added.
Ali Shaibu spoke on BusinessLive on the JoyNews channel as part of the launch of Insurance Brokers’ Awareness Month which seeks to spread the knowledge of insurance and insurance broking.
Several activities have been outlined for the month of October, under the theme, “The Insurance Broker, your Gateway to Insurance.”
On her part, Assistant Treasurer at IBAG, Sheila Wristberg who was also on the show indicated her outfit’s preparedness, as part of the activities, to sensitise trade associations on the need for insurance.
“When it comes to the trade associations, some of them and certain professionals in Ghana need compulsory professional indemnity insurance, but it is even possible that they are not even aware of it.
So this is why we are engaging the associations to advise them on the kind of policies they need for their industry”, she said.