The officials specifically challenged the Ministry of Finance and Economic Affairs, the National Assembly and the Central Bank of The Gambia to consider reforming the industry in a bid to take our tax-based economy safely to the next level of development.
The plea came at a forum that seeks to explore ‘the impact of the proposed reform in the insurance industry on the economic development of The Gambia’ organised by the Insurance Association of The Gambia (IAG). It was part of activities marking the Insurance Awareness Week 2015, an industry campaign designed to solidify the position of the country’s fledgling insurance industry.
The insurers said the benefits of reforming their industry to put on it a sound footing is beyond the sector alone and it can significantly expand the country’s burgeoning economy.
The comments of the insurers was preceded by a presentation on the proposed reforms by Abdoulie Baks Touray, a development economist, who pointed to certain critical areas that need to be reformed for the insurance industry to take its rightful position in the development of The Gambia. Mr Touray, also the president of the American Chamber of Commerce and Industry of The Gambia (AmCham), said even though the country’s insurance industry is relatively doing well, it can do much better if certain critical reforms are undertaken in the industry.
He said if the Gambian economy is to be transformed in line with the wishes of the Gambian leader, President Jammeh, the transformation should start with the economic actors and one such key actor is the insurance industry.
The development economist said the insurance industry needs certain policy reforms such as mandatory local marine insurance in line with the recommendation of United Nations Conference on Trade and Development (UNCTAD). UNCTAD has recommended to all governments, globally, more than 25 years ago to legislate marine insurance and make it compulsory, locally. The majority of countries in the world have effected that recommendation except few countries including The Gambia, according to Mr Touray.
He said another reform that is needed in the insurance industry is for the government, through the Central Bank of The Gambia (CBG), to review the Third Party Insurance policy.
Presently, The Gambia has the lowest tariff for motor insurance in West Africa; yet still most of the claims that the industry is struggling with are claims that emanate from motor insurance. Therefore, there is a need to review and have a standard tariff for motor insurance as costs of spare parts are skyrocketing and third party injury and death claims are high.
Furthermore, the AmCham president said there is need to legislate the non-bank financial sector. He said already studies have been done in that regard and a draft act has been prepared, now waiting to be tabled at the National Assembly for approval which will pave a way for the establishment of mortgage companies, leasing companies, and venture capital companies in The Gambia.
Besides, Mr Touray there is need for an autonomous insurance commission in The Gambia so that the country’s insurance industry can be at the same wave length as other industries globally. However, he said the Central Bank, the regulator of the financial industry including insurance, has been doing a tremendous job in terms of regulating the insurance industry.
But, Mr Touray said, in terms of best practice, in terms of what obtains in the sub-region and around the world, there is a need for an autonomous commission to regulate the affairs of the insurance industry.
The AmCham president also called on the chief executive officers of the insurance companies to look at the possibility of introducing micro insurance.
“I take the cue from what has been happening in the banking sector. If you look at the statistics, only 15 to 20 percent of Gambia’s population have bank account, prior to the introduction of micro finance by the Central Bank,” he said.
Now that micro-finance is introduced, a significantly number of Gambians have bank accounts either with the mainstream banks or the micro-finance institutions.
In the same vein, Mr Touray said by introducing micro-insurance, the insurance companies will be providing insurance to the uninsured and underinsured which will lead to significant increment in insurance policy holders in The Gambia.
According to statistics from the Central Bank, as quoted by Mr Touray, the Gambian economy in 2014 has contracted by 5 percent. He said in order to avoid such scenarios from happening and to significantly expand the country’s economy, opening avenues within the insurance landscape should be done and done now.
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