In a bid to protect policy holders, the National Insurance Commission (NIC), Ghana, recently secured a court order to take over the IGI subsidiary. The move will pave way for the eventual liquidation and closure of the company’s operations in Ghana.
The Commission, whose mandate is to ensure effective administration, supervision, regulation, monitoring and control of the business of insurance to protect the insurance industry and policy holders cited the Cash flow insolvency issues and operational difficulties faced by IGI Ghana, which had made it difficult to settle and pay claims as they fell due, as reason for its intervention. IGI had long indicated its resolve to divest from Ghana and allow NIC Ghana to take over the company, after it was obvious it can no longer cope with the operating environment in Ghana.
It was gathered that the commercial court, on the recommendation of NIC, has appointed Mr. Asante Marfo-Ahenkorah (President of Ghana Insurance Brokers Association- GIBA), and , Mr. Daniel Afriyie (Managing Director of Claim Limited) as administrators of the life and general insurance business of the company in line with procedures to liquidate the assets of IGI after December, 2013. The administrators were given six-month duration to complete their work and the cost that will be incurred through the administrators’ activities will be borne by NIC and later reimbursed by IGI as instructed by the court. It was discovered that all the general insurance policies held by IGI’s clients have expired, except life insurance policy holders who will be affected by the liquidation process. However, plans are underway to transfer them to other insurance firms that are robust enough and interested to accept the life insurance business of the insurer to enable clients continue being served.
IGI, a Nigerian-owned insurance firm with particular focus on special risks such as oil and energy, engineering, aviation, and industrial risk management, entered the Ghanaian market in 2008 when it acquired the operations of Network Assurance as part of its Pan-African expansion drive. The company, on entering the market, bought several shares of the publicly-traded SIC Insurance Company. However, IGI’s underwriting profit has been awful and recorded several losses, drawing concern about the company’s entry strategy.
However, Industrial and General Insurance (IGI) said it withdrew its holding in Ghana subsidiary due to hostile business environment, especially to Nigerian investors in that country. The company’s Deputy Managing Director, Mr. Rotimi Fashola, disclosed this while responding to alleged liquidation of the company in Ghana, saying irreconcilable differences with local partners are equally responsible for the company’s decision. According to him, “We have decided to pull out of Ghana due to irreconcilable differences with local partners and hostile business environment to Nigerian investors.”