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Business News of Monday, 6 August 2018

Source: Myjoyonline.com

SIC hints of plans to establish a bank as growth strategy

Insurance giant, SIC Insurance, is considering establishing a bank very soon to spur growth.

The Insurance company says it is looking at following the footsteps of other insurance firms in developed countries that have branched into mainstream banking after long service.

Managing Director of SIC Insurance, Stephen Oduro, told Joy Business his outfit can start banking operations today if it secures the necessary license and approval.

“Because insurance companies collect premiums, we always have reserves which we can use to invest,” he said adding that going into banking would be a good way to finance mortgages.

SIC insurance and Ivory Finance case

The Managing Director of the Insurance firm said it will do everything in its power to present a strong case when its case against Ivory Finance opens in the Supreme Court.

He, however, noted the legal tussle indeed impacted on its operations but maintains that due to some of these measures instituted the challenge has been dealt with.

The Supreme Court recently gave SIC Insurance the green light to present its case against Ivory Finance Company.

The case which began some five years ago is still pending in the courts.

The long drawn-out legal tussle between SIC Insurance and Ivory Finance over a loan, the former guaranteed for Italconstruct, which went bad, has been pending for five years.

He maintained that SIC Insurance has put in place measures to ensure that a similar disagreement does not recur.

Financial Performance

The Insurance firm appears to have “turned the corner” in terms of its financial performance.

The 2017 financial results showed strong growth in its profit-after-tax, share price, and a marginal growth in premiums.

Profit-after-tax, for instance, went up by 109 per cent from 5.4 million cedis in 2016 to 11.3 million cedis in 2017, while net premiums after reinsurance increased by 4.3 per cent to 98 million.

The Managing Director of the Company attributes the growth figures to measures introduced to turn around the company.

Technology

Mr. Oduro noted the insurance firm will incorporate technology as one of its growth strategies as it works to develop new products.

Another growth strategy, he revealed, was a heavy focus on the microinsurance business.

He noted that microinsurance is the appropriate platform to reach out to individuals and small enterprises that do not have access to insurance in the country.

Meanwhile, the National Insurance Commission (NIC) is currently working to increase the minimum capital requirement for insurance firms in the country possibly by the end of this year.

According to Mr Oduro, the increase in the minimum capital requirement is long overdue.

He maintains that the move by the NIC would strengthen the insurance business in the country.