Third-party insurance premiums will rise on January 1, 2024. This came after the insurance companies received permission from the National Insurance Commission to make these changes.
Private vehicles will thus pay 482 for third-party insurance, while commercial taxis will pay 437.
Private corporations, on the other hand, will be charged $482, while hiring vehicles will be charged $652. Motorcycles will also be charged $252.
Meeting new tariffs and potential sanctions.
A letter from the Ghana Insurers Association to insurance companies, obtained by Joy Business, advised members to strictly adhere to the approved rates or face sanctions from the NIC.
The NIC also told Joy Business that it is closely monitoring the new tariffs to see if they are consistent with what was approved.
It also stated that it will not hesitate to sanction companies that do not comply with the approved tariffs.
The Ghana Insurers Association also informed its members that the pre and post-2020 tariffs will no longer be accepted.
oy Business has also learned that the capacity implications of 3000 and 5000 have been removed and will have no effect on premium collections.
Reasons for the increase
In a letter to insurance companies, the Ghana Insurers Association stated that the increase would help improve the insurance companies’ financial position and encourage the payment of legitimate claims.
Increased third-party insurance premiums and the impact of VAT on non-life insurance products.
According to Joy Business, the increase in third-party insurance premiums did not take into account the Value Added Tax (VAT) Amendment Bill passed by Parliament last week, which may impose a 21.9% VAT on all non-life insurance products. This will have increased insurance premiums by more than 30%.
The Ghana Revenue Authority has yet to communicate the date for the implementation of the five tax bills to the public. However, insurance companies have proceeded with these adjustments, minus the 21.9% VAT application on non-life insurance products and businesses.
This could imply that when the GRA begins implementing the VAT Amendment Bill, insurance premiums will rise again.