PLAYERS in the insurance industry are calling on the government to suspend the implementation of the Value Added Tax (VAT) on non-life insurance policies.
They said the tax would affect ongoing efforts to deepen insurance penetration in the country, especially in the micro-insurance sector that targeted low-income earners, petty traders and informal workers.
The 21 per cent VAT on non-life insurance policies introduced by the previous government in the 2024 budget excludes motor insurance, which remains compulsory, but applies to all other non-life insurance products. It was implemented on April 1, 2025.
The Managing Director of KEK Insurance Brokers Ltd., Ali Shaibu, said while corporate entities and property owners might have the capacity to absorb the increased costs, individual policyholders and small businesses would struggle with the additional 21 per cent tax burden.
"Definitely, it would affect insurance penetration because insurance thrives on adequate disposable income. At the end of the month, after taking care of food, rent, and medical bills, if there's something left, then people think about insurance. Now, if the price of insurance has gone up because of the value added tax, why would they go there?" he queried.
Public lecture
He was speaking with the media on the sidelines of a public lecture to mark the 35th anniversary of KEK Insurance Brokers Ltd. in Accra.
The public lecture, which was on the theme: "35 Years of Excellence – Celebrating our Journey So Far", brought together players in the insurance industry, policymakers and academia to reflect, share insights, and explore the future of the industry.
It also served as a 15-year memorial service to honour the legacy of the Founder, Kwesi Essel Koomson.
Present at the event were the Acting Commissioner of Insurance, Dr Abiba Zakariah; the Acting Deputy Commissioner of Insurance, Bernard Ohemeng-Baah; the Chairman of the Insurance Awareness Coordinators' Group (IACG), Wilson Tei; the Group CEO of Star Assurance, Samuel Ocran; the Chairman of the Committee on Premium Undercutting and Unethical Practices, Ivan Avereyireh; the Chairman of the Ghana National Bureau of the ECOWAS Brown Card Insurance Scheme, Benjamin Yamoah, and representatives of the Canadian Chamber of Commerce.
"We have looked at some policies, such as micro-insurance, that the woman selling tomatoes in the market or selling foods at Katamanto would buy and pay ten cedis a week or ten cedis a month for cover. Those policies should be exempted, so that the poor could continue to buy them. If the government should suspend it, it would be the best thing to happen," Mr Shaibu stated.
Insurance brokers
Mr Ocran said KEK was poised to maintain its market leadership position over the next decade by strengthening international partnerships and retaining experienced staff.
He highlighted several factors reshaping the insurance broking landscape, including political influence, technological innovation, regulatory changes, and evolving customer needs.
"Politicians influencing the world of brokers and risk placement will increase as it reflects the broader societal dynamics. Claims will also be paid based on the spirit, and not merely the letter of the policy. Also, brokers risk losing the retail market space unless they continuously invest in technology for seamless customer service," he stated.
The Board Chair for KEK Insurance Brokers Ltd., Felix Addo, called on all stakeholders to support KEK's continued vision and growth.
He emphasised the need for insurance buyers to advocate increased insurance penetration in the country, highlighting insurance's critical role as a risk management tool for individuals and businesses.
