Insurance: Failure to investigate claims could lead to early depletion of funds – Dr Justice Ofori

Commissioner of Insurance, Dr Justice Ofori, has said it is important for insurance companies to rigorously investigate claims before payments are made to policy holders.

According to him, this is due to the prevalence of insurance fraud in the country.

Speaking at a three-day workshop held for journalists from August 19 to August 21, 2022, Dr Ofori quipped that, about 30% to 40% of insurance claims are fraudulent.

“About 30% to 40% of claims made are insurance fraud, and that is why a lot of investigations are done by insurance firms before payments are made.

“Because if that is not done, it will come to a point where the insurance pool (funds) will be depleted,” he remarked.

In an earlier interview, Dr Ofori averred the Commission is looking to set up a digital platform to monitor and track processed claims by all insurance companies in the country.

“We are looking to build a digital base which is going to be a hub on which all the insurance companies in the country will have to process their claims and once we have that information we can track down people who are high risk, involved in fraudulent claims and all that. Because for now we don’t have the software to do that and so its very difficult to track persons that make fraudulent claims,” he said.

Insurance penetration Vs coverage

Touching on insurance penetration and coverage in the country, Dr Ofori expressed satisfaction at the rising rate of insurance uptake (coverage) among Ghanaians despite the low penetration rate.

According to the Commissioner of Insurance, recent data gathered by the Commission indicates that insurance coverage has increased from 29% to 44.4% in the last five (5) years.

“In 2021, 44.4% of Ghanaians have some form of insurance, and that is an improvement from the 29% recorded five years ago.

“The increased coverage or uptake shows that Ghanaians appreciate insurance, and for me coverage is more important than penetration,” he remarked.

Further explaining that, “low insurance penetration does not mean a country is not performing well with regards to its insurance industry, because insurance penetration could fall due to increments in GDP.

“Some countries can have high insurance penetration but low coverage or uptake, whereas others can have high coverage and low penetration. But for me, insurance coverage is more important.”

Insurance penetration, Dr Ofori explained, is the total premiums paid as a ratio to the country’s GDP.

Insurance penetration in the country, he noted, currently stands at 3% of GDP.