Accra-Ghana, Nov. 17, GNA – The Ghana Union Assurance Life and the Phoenix Life Assurance Company Limited (PLAC) have merged operations to form the Impact Life Insurance with a focus on working with the underserved and first-time insurance customers.
Mr Sheriff Abudu, the Chief Executive Office of Impact Life Insurance, speaking at the merger event, said the Ghanaian insurance industry remained one of the most attractive sectors in the country.
He said for the first time, two life Insurance companies had come together with their unique strengths to create an unprecedented company that would undoubtedly transform the sector with relentless creativity and innovation.
In December 2021, Uhuru Capital, wholly acquired and recapitalized PLAC to enable the Company to meet the National Insurance Commission’s recapitalization directive and to provide it with the resources to grow its market share in the rapidly growing Ghanaian life insurance sector.
Then in February 2022, Uhuru Capital received approval from the NIC to merge PLAC with Ghana Union Assurance Life Company Limited (GUA Life), the first merger of life insurance companies in Ghana.
Mr Abudu said even after the Insurance Act 724 Section 26, where there was a separation of non-life and life businesses, it was the non-life partner that had the full attention and focus of shareholders.
He said as these became commonplace in Ghana, the results were palpable; the smaller life insurance setups became the orphaned businesses in no time with limited capital and inadequate management attention.
“This then led to a situation where they failed to achieve substantial scale and growth,” he added.
He said when the National Insurance Commission (NIC) raised the minimum capital requirement of life insurers, many of these companies were left with intractable challenges and uncertainties about how to raise additional capital up to GH₵50 million.
He said Ghana Union Assurance Life was borne out of the life portfolio of Ghana Union Assurance Company Limited
He said currently, the overall insurance penetration in the country is around 1.1 per cent of GDP compared to about 2.8 per cent in Kenya and a whopping 17 per cent in South Africa.
The Life insurance penetration is less than 0.5 per cent of GDP with internally led growth rates of 25 per cent of Compound Annual Growth Rate in gross premiums in the last two years.
He said the sector was also much less dependent on entrenched brokers, with just 8 per cent of life insurance distribution channels available versus 44 per cent in the non-life insurance.
“We will conduct our affairs with the highest moral, legal and ethical standards and comply with all laws governing our operations,” he added.
Mr Kwabena Agyekum, the Registrar and CEO of Chartered Institute of Marketing, Ghana, said the merger was a symbol of the good relationship between the two companies.
He said mergers were a consolidation of the strengths of the merging companies, therefore customer and other stakeholder expectations of the entities would be high.
He said stakeholders expect to see a bigger, stronger, a more resourced and agile company that responded more proactively to their needs.
The Registrar said the merger must continue to assure stakeholders of the bigger promise made with the launch of the new brand.
He said although the penetration levels for insurance in general, and life insurance specifically remained low, consolidation and innovation makes the difference and would be the key drivers for growth, going forward.
Nana Adow Dankwa, Director, Impact Life Insurance, said the combined business had a strong capital base, a strong footing in both the micro and group life segments of the market and good geographic coverage across its branch and agent network.
“We have taken the best that each business had, made some changes and are working to position the merged GUA Life to achieve more going forward,” he said.
He said Uhuru Investment Partners have had a keen interest in the Ghanaian Life Insurance sector and spent several years evaluating prospective targets.
