We are taking measures to make annuity market grow – NIC

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Mr Kofi Andoh, the Deputy Commissioner of Insurance, at the National Insurance Commission (NIC), says it is building a regulatory framework to ensure active annuities market.

Annuities are a range of insurance products that provide decent periodic payments for retirees.

He explained that the market was relatively new and that NIC and stakeholders to ensure that insurance companies had the relevant requirements, competencies and capacities to protect customers.

Mr Andoh, who was speaking at the launch of an annuity campaign in Accra, said NIC was developing models and governance, including investment and fund management to ensure an active and buoyant market.

The public awareness campaign is a joint initiative of the NIC and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH aimed at sensitising about the importance of annuities as a tool for financial independence during retirement.

Already, five life insurance companies had been given the clearance to start selling products that have met the requirement.

The campaign objectives will be achieved through the use of television, radio, social media, and public engagement outreaches.

Mr Andoh said the laws of Ghana currently permitted only the sales of immediate annuities, a financial plan that allows people to make one lump-sum contribution, and converted into an ongoing, guaranteed stream of income for a specified period of time.

Mr. Kofi Andoh, stated that “the benefits associated with annuities cannot be overemphasized: financial security, liquidity, guaranteed lifetime income supply, maintenance of lifestyle, and ability to cope with unforeseen and unplanned expenses, to name a few”.

He said a recent study showed that a comfortable retirement could only be realised based on how much they earned, how their families were planned, and how they prepared for retirement amongst others.

He said the study found that most of the pensioners complained of receiving low pensions, which could not support their lifestyle and most of them either lived in either uncompleted buildings or were still renting.

Mr Detlev Axel Jahn, the Head of the Programme for Sustainable Economic Development at GIZ-Ghana, said, in 2020, the NIC conducted trainings for the life insurance industry in the design and pricing of annuity products which birthed five products that had been approved by the NIC and introduced to the market.

“With the insurance industry’s increased interest in developing annuities and a promising insuring market, the insurance industry is now more than ever, ripe for raising
awareness of liquidity risks faced by people during 
retirement,” he said.

Mr Jahn said although there was conflicting information 
about annuities, the campaign would help debunk all the myths associated with Annuities and educate Ghanaians on the
 need to adopt Annuities as a viable financial tool for
retirement planning.

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