CONTENTS. Page Foreword 2 Chairman s Report 3. THE NATIONAL INSURANCE COMMISSION Board of Directors 4 Management Team 4 NIC s Operations 5

Transcription

1 CONTENTS Page Foreword 2 Chairman s Report 3 THE NATIONAL INSURANCE COMMISSION Board of Directors 4 Management Team 4 NIC s Operations 5 THE INSURANCE MARKET 2008 Economic Environment 10 Ghana Insurance Market Report ( ) 11 Insurance Market Financial & Ratio Analysis 22 Conclusion 57 APPENDICES 1. Corporate Information Financial Reports Solvency Guidelines List of Registered Insurance Companies List of Registered Reinsurance Companies List of Registered Insurance Broking Companies List of Registered Loss Adjusting Companies List of Registered Reinsurance Broking Companies 84 1

2 FOREWORD MICROINSURANCE PRODUCTS IN GHANA Introduction Microinsurance is defined by Michael J. Mccord, a microinsurance expert as risk-pooling products that are designed to be appropriate for the low income market in relation to cost, terms, coverage and delivery mechanisms. Microinsurance can help people improve their financial standing and help them protect their gains. The Informal Sector of the Economy in Ghana The National Insurance Commission (NIC) has always conducted a systematic public education programme nationwide in an effort to explain the need and value of insurance to the public. In order to achieve a high insurance penetration in Ghana, the industry has to develop microinsurance products for people in the informal sector who are mostly traders, artisans, drivers and farmers. The Anidaso policy developed by Glico Life Insurance Company Limited is an example of these insurance products. Other companies should be encouraged to develop more microinsurance products. Pilot Testing and Product Development The introduction of microinsurance products must be preceded by market research in order to identify the risks which are generally faced by the target group for microinsurance. Some of the risks may be health-related in which case the product demanded may be a health insurance policy or a health care plan. Some products may be tied to loans which a microfinance institution may give to the people involved. Having identified the needs of the people, it may then be necessary to consider the delivery channels which will be most effective. Pilot testing will be done to find out whether the product developed will really satisfy the needs of the people. After pilot testing, the company can then go to product design and consider the channels of distribution. Legislation and Supervision The NIC will have to be able to regulate the business of microinsurance as the other classes of insurance under the Insurance Act, 2006 (Act 724). The International Association of Insurance Supervisors (IAIS) has recognised the importance of microinsurance. Microinsurance will be one of the topics to be discussed at the Regional Seminar for African Insurance Supervisors to be organised in Ghana in October, Insurance regulations may impose special licensing requirements for Microfinance Institutions acting as insurance agents. Microinsurance products for low-income markets frequently require the insurance Commission s approval. Conclusion Microinsurance will be a means of developing products to insure the large informal sector in Ghana and allow the Insurance industry to increase the level of insurance penetration. The NIC organised a seminar on Microinsurance with the German Technical Cooperation (GTZ) in September As we move forward, it is hoped this collaboration will continue. 2

3 CHAIRMAN S REPORT The year 2008 witnessed Global Financial Crisis which affected the economies of major industrial countries. Fortunately, this did not have any direct adverse effect on the Insurance Industry in Ghana. Industry Performance It is worthy to note that bancassurance had a boost with the collaboration of Glico Life Insurance Company Limited and National Investment Bank Limited (NIB). This was approved in This is a trend which is likely to continue in the future. It is our hope that the banks will act as distribution channels for some of our insurance products in order to increase insurance penetration for the industry. The growth in premium income of non-life business continued to be phenomenal registering 31.9% for Total non-life premiums increased from GH 70.20million in 2004 to GH million in the year Life business did not grow as much as it did in Life business recorded a growth rate of 32% in 2008 as compared to 36% in There is the need to do more marketing of the new products which the companies have introduced to the market especially funeral insurance products. Insurance Penetration Insurance penetration for 2008 was 1.57%, a very low rate as compared to jurisdictions like South Africa with a rate of 12.7%. Some of our companies have started developing micro insurance products for the informal sector. It is our firm belief that such new products which will meet the needs of people in the informal sector will be developed and there should be continuous public education on the part of the NIC and also the insurance companies. 3

4 THE NATIONAL INSURANCE COMMISSION CORPORATE INFORMATION Board of Directors: Lt. Gen. Joseph Henry Smith (Chairman) Ms. Josephine Jennifer Amoah (Commissioner) Mr. Stephen Korbla Okudzeto Mr. William F. Duncan Col. John Armah Okai Mrs. Evelyn Pra-Gohoho Mr. Wilfred Sam-Awortwi Dr. Daniel N. Tapang Mr. Wilson Q. Tei Mr. Enoch Hemmans Cobbinah Secretary: Mr. Ernest Frimpong Senior Management: Ms. Josephine Jennifer Amoah Commissioner Mrs. Nyamikeh Kyiamah Mrs. Emma Araba Ocran Mr. Michael Kofi Andoh Mr. Joseph Bentor Mr. Isaac Yaw Buabeng Mr. Martin Dornor Abayateye Deputy Commissioner Legal Director Head, Supervision Head, Finance & Administration Head, Marketing, Research & External Relations Internal Auditor Auditors: Osei Kwabena & Associates (Chartered Accountants) 71 Palace Street, B603/18 North Kaneshie P. O. Box Accra-North Registered Office: National Insurance Commission Independence Avenue North Ridge P. O. Box CT 3456, Accra 4

5 NIC OPERATIONS LICENSING As at December 31, 2008, the number of licensed insurance entities were as follows; Non-life Companies: 21 Life Companies: 17 Reinsurance Companies: 2 Insurance Brokers: 36 Reinsurance Broker: 1 Loss Adjuster: 1 New Insurance Companies Four (4) new non-life companies and one life company were licensed in These were Equity Assurance Ghana Limited, International Energy Insurance Ghana Limited, Intercontinental Wapic Insurance Ghana Limited, Nem Insurance Ghana Limited and Express Life Insurance Company Limited. All the non-life companies are subsidiaries of Nigerian insurance companies. Beacon Insurance Company remained unlicensed as at the end of It is therefore the only existing company which is yet to successfully go through the separation and re-licensing required under Act 724. New and Re-licensed Brokering Companies Four broking firms were added to the list in Two new brokers, namely: Asterix Brokers Limited and Shield Insurance Brokers Limited were licensed. Two existing broking companies, Saviour Insurance Brokers Limited and Newland Risk Management Limited finally met the re-licensing requirements and were duly re-licensed in December, Bancassurance A bancassurance collaboration between Glico Life Insurance Company Limited and National Investment Bank Limited was approved in Under this agreement, the bank as a corporate agent will use its branch network to sell the insurance products of Glico Life Insurance Company Limited to its clients. This is the second bancassurance collaboration. The first was between Enterprise Life and Standard Chartered Bank which was approved in Agents Seven hundred (700) new agents were licenced in 2008, while the licences of 1,100 existing agents were renewed. This brought the total number of agents officially registered with the NIC to about 1,800 although it estimated that there are about 4,000 agents selling insurance products. COMPLIANCE To assess compliance with Act 724, all branches of insurance companies in all the regions were inspected 5

6 in To help improve compliance and protect the insuring public, the Commission is developing guidelines to regulate the operation of branch offices of insurance companies. In addition, the Commission effectively conducted on-site inspections of Ten (10) insurance companies and ten (9) broking companies within the year. Reinsurance Premium Transfer The Commission approved the following amounts as reinsurance premium to be transferred to overseas companies. These were US$2.26 million, 7,400, 76,000 and the dollar equivalent of GH 752,000. The local companies involved were Ghana Reinsurance, Ghana Union, Enterprise Insurance, SIC Insurance, Global Alliance, Phoenix Insurance, CDH Insurance and Metropolitan Insurance Company Limited. PRODUCT APPROVALS The Commission approved the following products for sale in accordance with section 45 (1) of Insurance Act 2006, Act 724. Product Class of Business Company 1 Family Income Protection Plan Life Enterprise Life Ass. Co. Ltd. 2 Education Endowment Policy Life Enterprise Life Ass. Co. Ltd. 3 Funeral Insurance Plan Life Phoenix Life Ins. Co. Ltd. 4 Funeral Insurance Plan Life Ghana Union Ass. Co. Ltd. LEGAL MATTERS There was a phenomenal increase in the activities of the legal department following the passage of the new Insurance Act, 2006 (Act 724). The department in performing its core function of offering Legal opinion to the Commission also supported the Supervision department in the enforcement of the relevant sections of the Law to ensure compliance. The Commission continued to follow up on criminal and civil cases pending at the Law courts. Complaints and Settlements Bureau With the necessary cooperation from insurance companies and petitioners, the Commission successfully handled petitions and complaints from the public against various insurance companies. Most complaints were from persons with motor insurance claims against insurance companies. Apart from the main motor and life insurance complaints, the Commission also handled inter-industry complaints referred to it and special complaints from staff against management, insurance companies against insurance brokers and vice versa. 6

7 At the year ending 2008, Two hundred and forty-five (245) complaints were received from the public against insurance companies: Insurance Companies No. of Complaints 1. SIC Insurance Company Limited Network Assurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Uninsured Enterprise Life Assurance Company Limited 8 7. Donewell Insurance Company Limited 7 8. Vanguard Assurance Company Limited 6 9. Quality Insurance Company Limited Metropolitan Insurance Company Limited Ghana Life Insurance Company Limited Metropolitan Life Insurance Company Limited Provident Insurance Company Limited Ecowas Brown Card C.D.H Insurance Company Limited The Great African Insurance Company Limited (delisted) Reliance Insurance Company Limited (delisted) 1 Total 245 Motor Compensation Fund The Compensation Fund Committee intensified its operations in The Committee met four times during the year. The meetings discussed among others; the prudent management and investment of funds, various technical issues relating to motor insurance and the payment of reasonable levels of compensation to petitioners. Members also reviewed special petitions referred to it by the Awards Sub-committee, which met fortnightly during the year. The Awards Sub-committee of the Compensation Fund Committee had 21 sittings during which it interviewed 129 applicants during the year. The petitions received by the Committee still followed the trend of hit-and-run cases, uninsured vehicles and other petitions stemming from breach of policy conditions such as change of ownership and driving without a licence, which resulted in the repudiation of claims, by insurers. All 129 applications received the approval of the Committee and were awarded a total of GH 99,785. The funding of the motor compensation fund remained the same as in previous years: 7

8 Finances of the Compensation Fund (2008) GH Income: Contributions from insurance companies 287, Investment Income 194, Interest on bank account Expenditure: Compensation for accident victims 107, Contribution to Road Safety Commission 114, Public education 110, General expenses 53, Investments: Shares 51, T-bills 1,202, Accumulated Fund 864, Total Amount in Rescue Fund 500, SPONSORSHIP OF INSURANCE INDUSTRY PUBLICITY ACTIVITIES During the year under review, the Commission with the support of the Compensation Fund continued to maintain as one of its objectives, the promotion of public education on insurance in general, and motor insurance in particular. The primary focus of these educational programmes was on the role of the NIC, Complaints & Settlement Bureau, Compensation Fund, Motor insurance in particular and Life insurance in general. The Commission carried out public education functions in three regions and five district capitals. In all, Twelve (12) radio talk shows and Six (6) public fora with commercial drivers and the public was organized in the areas visited. PUBLICITY The Commission carried out a number of publicity and public education on the insurance industry. These include publications of the NIC s newsletter The Insurance Supervisor and brochures on some insurance products including fire, motor, accident and life products. INSURANCE INDUSTRY TRAINING CENTRE (IITC) To enhance its income generating capacity, the Commission continued to rent out its conference facilities to the public. 8

9 HUMAN RESOURCE DEVELOPMENT The Commission continued to strengthen its human resource capacity. Staff undertook a number of local training in the areas of on-site inspection, off-site analysis and technical insurance, among others. Opportunities were offered to some staff to go on attachment with some overseas regulatory authorities in order upgrade their knowledge and professional skills. Management also undertook some training on insurance supervision, notably in the areas of; effective monitoring and supervision, solvency, market conduct rules, risk-based supervision and consolidated supervision and management. 9

10 THE INSURANCE MARKET OVERVIEW ECONOMIC REVIEW 2008 Ghana s economy experienced considerable stress during For most part of the year, spiraling increase in oil prices and its knock-on effect on food prices, the world financial crises (global crunch) that turned progressively into a global recession and various global events impacted strongly on the Ghanaian economy. Despite the resilient nature of the economy, increased government spending as a result of hosting the African Cup of Nations, the African Union and UNCTAD as well as the high oil import bill exerted some pressure on the economy. The value of the Cedi came under significant pressure against the major currencies. This, among others, led to a high fiscal and current account deficit of 14.5% and 20% of Gross Domestic Product (GDP) respectively. The culmination of all these at the time of the global crisis led to the deterioration of the macro-economic environment. Year-on-year inflation increased from 12.7% in 2007 to 18.13% at the end of 2008 with the Bank of Ghana prime rate ending the year at 17%. With the benchmark 91-Day Treasury Bill rate at 24.7% and the 182-Day Bill at 26.2%, most banks raised their base rate above 25%. The year however, recorded a GDP growth of 7.3% as against 6.2% in 2007, the highest in Ghana for over two decades. Outlook for 2009 With the continued impact of the global economic crises, foreign direct investment, portfolio investment and private transfers including transfers from Ghanaians living abroad are expected to decline. It is unlikely that Official Development Assistance (ODA) from traditional development partners would rise even if they are able to meet outstanding pledges. While the price of crude oil has come down significantly, the prices of Ghana s major export commodities have declined. It is expected that the global recession would also impact negatively on non-traditional exports. These are likely to narrow government s fiscal maneuverability to propel a growth agenda. GDP growth is projected to fall to 5.9% in 2009 (2008: 7.3%). 10

11 GHANA INSURANCE MARKET REPORT INDUSTRY PERFORMANCE The insurance industry continued to make progress over the period under review. There was a general increase in premium income for both classes of business from GH 92.5 million in 2004 to nearly GH 276.5million in Both the Life and the Non-Life recorded a growth rate of 32% between 2007 and (Ref. Table 1). The contribution of Total Gross Premium to the Gross Domestic Product (GDP) has been rising steadily over the period but is still under the 2% mark. Table 1: Growth in Total Gross Premium Income Non-Life and Life Year Premium Income ( ) Growth Rate Insurance Penetration ,583, % ,325, % 1.26% ,207, % 1.40% ,457, % 1.49% ,494, % 1.57% Figure 1: Growth in Total Gross Premium Income (Life & Non-life) Gross Non-Life Premium Income There was a continuous growth in gross premium income for non-life business over the five-year period, although at a decreasing rate until Premium income increased from GH 70.2 million in 2004 to GH million in (Ref. Table 2). 11

12 Table 2: Growth in Gross Premium Income (Non-Life) Year Premium Income Growth Rate ,277, ,074, % ,597, % ,922, % ,250, % Gross Life Premium Income Gross premium for the life sector just like the non-life increased steadily but at a decreasing rate. However, the growth in this sector was higher than the non-life sector. Whereas life business recorded an average growth of 41.7% over the period, non-life had 27.7%. Life premiums increased from GH 22.3 million in 2004 to GH 89.2 million in 2008 (Ref. Table 3). The future of the industry is bright especially with the introduction of new products as well as microinsurance projects. Funeral insurance continues to enjoy high patronage especially because of our cultural demands. For as long as travel insurance remains a requirement for visa application, growth in gross premiums is ensured. Table 3: Growth in Gross Premium Income (Life) Year Premium Income Growth Rate ,305, ,251, % ,609, % ,534, % ,243, % 12

13 Figure 2: Gross Premium Income (Life & Non-life) Non-Life Life 13

14 Table 3: Company Performance - Non-Life NO. COMPANY Beacon Insurance Company Limited 153, , , CDH Insurance Company Li m ited 1,266,739 1, 185,672 2,571,531 3,918,000 5,642,000 3 Donewell Life Insurance Company Limited 2, 854,904 3,409,986 4,925,270 7,213,879 9,425,567 4 Enterprise Insurance Company Limited 10,101, ,846,993 13,997,400 16,535,000 19,886,000 5 Equity Insurance Company Limited ,530 6 Ghana Union Assurance Company Limited 3,765, 392 4,723,493 4,313,947 5,606,553 7,596,910 7 Glico General Insurance Company Limi ted - - 1,885,650 3,285,972 7,187,195 8 Global Alliance Insurance Company Limi t ed - 92,199 2,218, ,999,352 6,163,021 9 Industrial & General Insurance Ghana Limited 1,024,787 1,076,628 1,115,684 1,234, , International Energy Insurance Company Limited ,008, Metropolitan Insurance Company L imited 7,311,142 9,185,539 10, 9 50,999 12,556,397 15,116, Phoenix Insurance Company Limited 940,65 9 1,088,988 1,326,125 2,412,857 6,047, Prime Insurance Company Limited ,400 1,368, Provident Insurance Company Limited 2,256, 978 2,541,170 2,650,388 3,418,442 3,697, Quality Insurance Company Limited 1,466,679 1,790,806 3,034,102 4,210,820 5,888, Regency Alliance Insurance Company Limited 79,592 62, , , Star Assurance Company Limited 4,976,147 5,932,600 7,573,000 10,114,789 15,888, SIC Life Insurance C ompany Limited 25,416,000 36,388, ,581,800 52,805,558 58,032, Unique Insurance Company Limited 2,666,209 2,619,272 3,159,356 3,943,889 4,383, Vanguard Assurance Company Limited 5,972,9 53 6,990,482 10,052,080 11,219,091 18,295,576 TOTAL 70,252,401 91,074, ,597, ,922, ,250,912 14

15 Table 5: Company Performance - Life NO. COMPANY Beacon Insurance Company Limited 152, , ,309 83,003-2 Capital Express Assurance Company Limited - 1,236 6,525, CDH Life Insurance Company Limited 230, , , ,000 1,143,659 4 Donewell Insurance Company Limited 1,244,388 1,834,129 2,377,186 3,866,990 3,596,668 5 Enterprise Life Insurance Company Limited 2,077,011 3,812,606 6,515,948 10,147,887 15,429,897 6 Glico Life Insurance Company Limited 3,616,408 4,826,714 7,044,878 10,656,011 12,048,193 7 Ghana Life Insurance Company Limited 1,450,889 1,885,917 2,136,970 2,269,788 2,742,089 8 Ghana Union Assurance Company Limited 30,789 54, , , ,157 9 IGI Life Assurance Company Limited 55,118 70,756 73,494 70, , Metropolitan Life Insurance Company Limited 2,126,265 2,725,036 3,468,983 4,820,000 4,583, Phoenix Insurance Company Limited 243, , ,668 1,038,761 1,330, Provident Life Insurance Company Limited 1,107,872 1,605,164 2,443,293 1,068,488 3,721, Quality Insurance Company Limited 394, ,735 1,021,602 1,317,270 1,705, Star Life Assurance Company Limited 2,260,276 2,914,675 4,094,492 5,603,271 8,196, SIC Life Insurance Company Limited 5,131,000 8,204,400 14,236,300 21,218,773 27,751, Unique Insurance Company Limited 366, , , , , Vanguard Assurance Company Limited 1,817,116 1,305,854 4,236,697 3,853,238 5,795,933 TOTAL 22,305,149 31,251,164 56,133,643 67,534,641 89,243,821 15

16 Reinsurance Premium Income Growth in non-life premiums for reinsurance business witnessed marked fluctuations. For instance the rate increased from 12% in 2005 to 33.2% in 2006, and then fell sharply to 19.9% in 2007 and then in 2008 nearly doubled. In comparison to the non-life business underwritten by the direct insurers, whereas gross premium for non-life business increased at a rate of about 32%, reinsurance non-life premiums increased by 39%. This indicates that reinsurers may be taking on more external business. Life business for the reinsurers also experienced marked fluctuations starting with a negative growth rate of -17.7% in 2004 and ending with 113.6% in It is worthy to note that Mainstream Reinsurance Company Limited did not underwrite any life business within the period. In Ghana, the common practice is for life insurers to retain a greater part of their business for their net accounts. This is because, life insurance policies cover long periods and hence a very good source of gaining long-term funds for investment and also for growth. Table 6: Growth in Reinsurance Gross Premium Income (Non-Life) Year Premium Income Growth Rate ,453, ,030, % ,017, % ,399, % ,383, % Table 7: Growth in Reinsurance Gross Premium Income (Life) Year Premium Income Growth Rate , , % , % , % ,156, % 16

17 Premium Income by Class of Business ( ) Motor insurance continued to be the highest premium income earner throughout the period under review. This class of business increased gross premium from GH 35.4 million in 2004 to GH 91.5 million in It has experienced some fluctuations with respect to total market share although gross premiums continue to increase. For instance, market share decreased from 38.3% to 33.1% in 2004 and 2008 respectively. However, its contribution to non-life business was 48.9% in It may be concluded that the compulsory nature of this line of business accounts for its leading role in the total market premiums. Accident insurance maintained its position as the second highest non-life premium earner. It recorded a gross premium income of GH 14.9 million in 2004 and GH 49.1 million in Just like motor insurance, it has experienced fluctuations in its market share. For instance in 2004, its market share was about 16% but this decreased to 13.6% in 2006 before picking up again to 17.8% in Fire insurance was the third highest contributor to total non-life market premium in 2008 and recorded a gross premium income of GH 31million in 2008 from GH 12.5 million in Its market share was 11.2% with respect to total market premiums. This line of insurance business has a great deal of potential especially if section 184 of Insurance Act, 2006 (Act 724) is fully implemented. The above section requires every commercial building (as well as those under construction) to be insured against the hazards of collapse, fire, earthquake, storm and flood. Marine insurance continued to be the least contributor to total market premium. Gross premium for this line of business was just a little over GH 3million in 2008 and a market share of 4.8%. In fact, the market share was the same for 2007 although premium income increased. This line of business can improve if all imports into the country are locally insured as a matter of policy. Life business experienced a steady growth in premium income over the 5-year period. Growth in market share was at an increasing rate from 2004 to This however stagnated between 2007 and 2008, the increase in gross premiums not withstanding. Gross premium income increased from GH 22.3 million to GH 89.2 million in 2004 and 2008 respectively. Life companies have been innovative but there is still more to be done. Insurance companies continued to develop new products as well modify their mode of operations. These have accounted for the continuous increase in total market premiums. The industry can go a long way if some sections of the new Insurance Law are fully implemented. Also, stakeholders may lobby government for tax incentives for life insurance policyholders or some compulsory insurance as a national policy. There are also areas such as the non-formal sector which may be vigorously tapped. 17

18 Table 8: Premium Income Distribution By Class of Business CLASS Motor 35,457, % 48,671, % 58,963, % 69,020, % 91,542, % Accident 14,925, % 17,780, % 22,310, % 37,897, % 49,122, % Marine 7,297, % 9,303, % 9,759, % 9,954, % 13,132, % Fire 12,538, % 15,294, % 23,427, % 24,626, % 31,085, % Life/Health 22,305, % 31,251, % 49,609, % 67,534, % 89,243, % Others* , % 2,097, % TOTAL 92,524, ,301, ,070, ,457, ,224, *Travel and Bonds 18

19 THE BROKER MARKET Two new brokers, namely, Shield Insurance Brokers Limited and Asterix Brokers Limited were licensed in PERFORMANCE OF THE BROKING COMPANIES Thirty-seven (37) companies had submitted their audited accounts as at the time this report was being prepared. Total gross commission recorded for these companies was GH million in Out of this, an amount of GH 9.16 million constituting 90.3% was spent on management expenses. Table 9: Brokerage Earned by Broking Companies Company Akoto Risk Management Limited 61,170 90, , , ,263 2 All Risks Consultancy Limited 175, , , , ,864 3 Alliance Insurance Brokers & Consultants Limited 79, , , Allied Insurance Brokers Ltd 3,156 2,988 3,287 11,198 19,354 5 Alpha Insurance Brokers Limited ,384 6 Apex Insurance Brokers Limited - 20,513 14,205 32,421 40,643 7 Ark Insurance Brokers Company 23,640 14,020 27,506 45, ,520 8 Asterix Brokers Limited ,344 9 Ceris International Limited ,116 70, Claim Limited 166, , , , , Crown Insurance Brokers 126, , , , , Danniads Limited 152, , , , , Double D & M 34,282 46,220 61,213 76,104 73, Dynamic Insurance Brokers 14,515 17,418 18,006 19,543 60, Edward Mensah, Wood & Associates 606, , ,097 1,080,230 1,610, First Anchor Risk Management 403 5,138 14,258 21,777 52, Ghana International Insurance Brokers , , Global Impact Insurance Brokers Ltd 28,997 47,215 75,337 55,666 57, Gras Savoye Brokers Limited , , Horizon Insurance Brokers Limited 24,732 92, , , ,906 19

20 21 Insurance Centre of Excellence ,519 49, Insurance Consultancies Int. Limited 265, , , , , Inter-Africa Brokers Limited 6,186 4,421 5,164 6,524 15, International Consortium Brokers Ltd 18,527 17,962 31,838 36,970 40, JeRock Insurance Brokers - 9,086 36,342 43,637 58, KEK Insurance Brokers limited 1,654,328 2,201,940 2,642,328 2,191,152 2,781, KEK Reinsurance Brokers Limited , , Lordship Insurance Brokers 28,510 17,553 27,032 39, , Manyo-Plange & Associates 7,392 8,670 13,183 19,278 28, Marine & General Brokers Limited 100, , , , , Maxpal Intermediaries 22,110 47,212 46,010 58, Midas Insurance Brokers Limited , Newland Risk Management 90, , , , , Progressive Insurance Brokers Ltd - 6,870 23,784 56,399 67, Prudent Consult Limited - 23,156 65,233 77, , Safety Insurance Brokers Limited 80, , , , , Saviour Brokers 22,003 35,581 17,275 19, Trans-National Brokers Limited 62,331 97, , , , Tri-Star Insurance Services Limited 196, , , , , UD Insurance Services 2,401 2,881 3,457 4, Universal Insurance Consultants Ltd 83,759 95, , , ,258 TOTAL 4,137,997 5,187,225 6,456,057 6,945,054 10,035,785 Management Expenses Earnings of Top 10 cos. Percentage of Top ,007,843 9,158, ,341, % The top 10 companies contributed GH 7.34 million constituting a market share of 73.15% and this included KEK, Edward Mensah, Wood and Associates, Safety, Danniads and Crown Brokers among others. KEK Insurance Brokers Limited continued to lead the market with GH 2.78million; however, its market share dwindled to 27.7% in 2008 from the previous year s of 31.5%. It is worthy to note that Safety Insurance Brokers Limited was the third highest in terms of brokerage, moving up a step from the previous year. 20

21 Table 10: Market Share by Brokerage Company 2005 (%) 2006 (%) 2007 (%) 2008 (%) 1 KEK Insurance Brokers Limited Edward Mensah, Wood & Associates Safety Insurance Brokers Limited Danniads Limited Crown Insurance Brokers Tri-Star Insurance Services Limited All Risks Consultancy Limited Claim Limited Marine & General Brokers Limited Insurance Consultancies Int. Limited Others TOTAL From Table 11 below, it is obvious that growth in brokerage has been at a decreasing rate. There was a drastic fall between 2006 and 2007 just like the Life business of direct insurers. The growth rate between 2007 and 2008 was remarkable; from 7.6% to 44.5%. This could be as a result of a number of reasons including the introduction of innovative products, the licensing of a foreign broking firm and vigorous selling by brokers. Table 11: Growth in Commissions Earned Year Commission Earned ( 000) Growth Rate (%) ,137, ,187, ,456, ,944, ,035,

22 INSURANCE MARKET FINANCIAL AND RATIO ANALYSIS INTRODUCTION The 2008 insurance market financial and ratio analysis have been slightly varied from that of previous years. Following the separation of Life and Non-life businesses in 2007 as required by the Insurance Act, 2006 (Act 724), the ratio analysis has now been done separately for Life and Nonlife companies. This gives the opportunity to highlight the importance of certain ratios which may be of more relevance to either Life or Non-life. It also makes it possible to compare the two sectors in certain respects, to identify the causes of some problematic areas that need specific attention and generally present a clearer picture of the performance of the two sectors. The industry Balance Sheets have also been done for Life and Non-Life companies separately. Interestingly, both the Life and the Non-Life industries grew at 32% in This is a clear departure from the trend in previous years whereby the Life sector grew at a significantly faster rate than the Non-Life sector. The major growth indicators for both Life and Non-Life sectors are summarized in the tables below. Table 12: Key Growth Indicators (LIFE) Indicator 2007 (GH m) 2008 (GH m) Growth Rate Premium Income % Total Assets % Total Investments % Actuarial Liabilities % Total Capitalisation % 22

23 Table 13: Key Growth Indicators (NON-LIFE) Indicator 2007 (GH m) 2008 (GH m) Growth Rate Premium Income % Premium Debtors % Total Assets % Total Investments % Technical Provisions % Total Capitalisation % Using an average of the growth indicators, it can be concluded that the Life sector grew by about 40% whiles the Non-Life grew by about 36%. (The premium debtors growth has been excluded from the Non-life average). It is important to note that premium debtors grew almost twice as fast as the nonlife premiums. The rather low growth rate of investments is mainly due to the high accumulation of premium debtors which deprive the Non-life companies of investible funds. The industry average ratios have also been summarized in table 13 below. Table 13: Industry Average Ratios RATIO NON-LIFE LIFE Claims (%) Expense (%) Combined (%) Return on Equity (%) Retention (%) Investment Income as a % of Investments (%) Investment Income as a % of Premiums (%)

24 Gross Premium to Equity 1.9x 1.8x 1.2x 2.0x Net Premium to Equity 1.0x 1.0x 1.2x 1.9x Capital to Liabilities 1.5x 1.5x 2.3x 2.5x Outstanding premiums as % of Gross Premium (%) Outstanding premiums as a % of Total Assets (%) Underwriting Profit as a % of Gross Premium (%) Return on Assets (%) Investments to Total A ssets(%) Both the Claims and Expense ratios of the Life companies increased significantly over the period under review. Apart from the rising trend, the ratios are also higher than the Non-Life ones. The claims ratio of the Life companies is particularly high due to the very high surrender rates. The outstanding premium ratios of the Non-life companies also recorded significant increases over the period. This emphasizes the increasing significance of credit risk in the Ghanaian Non-life insurance market. The differences between the investments to total assets ratios of the Life and Non-life sectors are directly due to the high outstanding premiums. A very high percentage of the assets of the Life companies are in investments simply because Life business is on cash basis. Most of the assets of the Non-life companies are in uncollected premiums and hence the very low investment to total asset ratio. (Refer to the detailed analysis for more information) 24

25 PERFORMANCE INDICATORS LIFE COMPANIES Claims Ratio: This ratio measures underwriting profits as a percentage of Gross Premiums. It generally tries to ascertain the portion of the gross premiums that is available to contribute towards profits. It is calculated by dividing the underwriting profit by the gross premiums. Underwriting profits for this purpose is defined as net earned premium minus commissions, claims and management expenses. Table 14: CLAIMS RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited Almost all the Life companies made underwriting losses in both 2007 and This underscores the utmost importance of ensuring the adequacy and efficient management of investments by Life insurance companies. This may also be an indication of under pricing or excessive expenditure by Life companies. 25

26 Expense Ratio The Expense ratio is the percentage of total management expenses to gross premiums. The lower the ratio, the better in terms of management efficiency. Table 15: EXPENSE RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry average rose from 32% in 2007 to 40% in The ratios of SIC Life, GLICO Life, Enterprise Life, Provident Life and Quality Life have consistently been below the industry average during the two-year period under review. However, the ratios of Metropolitan Life, CDH Life, Unique Life, and Phoenix Life have consistently been above the industry average. The case of IGI Life is that of low business volumes which are not able to support current overhead expenses. 26

27 Combined Ratio This is calculated as Total Claims + Total Management Expenses divided by Gross Premium. It is combination of the claims and management ratios. Table 16: COMBINED RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry average rose from 63% in 2007 to 76% in However, the ratio of Metropolitan Life is far above the industry average. The ratios of CDH Life, Unique Life and IGI Life are dangerously high. 27

28 Return on Equity Ratio Return on Equity is the Net Profit after tax as a percentage of Shareholders funds (Equity). It measures the profitability of the companies; the higher the percentage, the more profitable the company. Table 17: RETURN ON EQUITY RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry s average Return on Equity ratio rose positively from 7% in 2007 to 16% in The ratios of Enterprise Life and Vanguard Life indicate good performance. However, the ratios of Donewell and CDH are as a result of inadequate capitalization than good performance. Metropolitan Life, on the other hand made a huge loss due to high claims ratio and actuarial valuation deficits. 28

29 Retention Ratio Retention ratio is a risk management ratio. This ratio measures the percentage of Net Premiums to Gross Premiums. It indicates the portion of the underwritten risks that have not been passed on to reinsurers. Table 18: RETENTION RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry average fell slightly from 98% in 2007 to 96% in With the exception of Ghana Union Life, all the other companies reinsured less than 10% of their business in The rather high retention in the Life sector is due to the fact the average sum insured per policy is quite low and hence can be retained. There is however the need to check concentration and aggregation risk. 29

30 Investment Income as a Percentage of Total Investment Ratio Investment Income as a percentage of Total Investments measures the rate of return on investments. It gives an indication of the quality of the investments made and held by the various companies. Table 19: INVESTMENT INCOME AS A PERCENTAGE OF TOTAL INVESTMENT Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited 9 14 The industry average rose from 6% in 2007 to 11% in Metropolitan Life, Vanguard Life, Quality Life and Unique Life consistently show good ratios. However, Glico Life, CDH Life and IGI Life show a low ratio and falling trend for the two-year period under review. 30

31 Investment Income as a Percentage of Premium Ratio Investment Income as a Percentage of Premium compares a company s income from investment to its premium income. This ratio measures the extent of support from investment income. It indicates both the quality and adequacy of the investments. This is very relevant considering the fact that Life companies usually make underwriting losses and have to depend on income from investments to make profits. Table 20: INVESTMENT INCOME AS A PERCENTAGE OF PREMIUM Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry average rose from 16% in 2007 to 18% in The ratios of SIC Life, Glico Life, Enterprise Life, Vanguard Life, CDH Life and Phoenix Life are below the industry average. However, the ratios of Metropolitan Life, Provident Life, Quality Life and IGI Life are all above the industry average. The ratios of Unique Life and IGI Life show inadequate premium income. 31

32 Gross Premium to Equity Ratio The Premium Equity ratios try to assess the capital adequacy of insurance companies. The ratio measures how much capital is available to support the premiums underwritten by a company. An example is, a Gross Premium to Equity ratio of 2.7 means that GH 1 of capital supports as much as Gh 2.7 of gross premium. Table 21: GROSS PREMIUM TO EQUITY RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited MetLife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited industry's average Gross Premium to Equity ratio rose from 1.2 in 2007 to 2.0 in The industry s average Gross Premium to Equity ratio rose from 1.2 in 2007 to 2.0 in The benchmark or industry best practice is however pegged at 2. This means that a ratio significantly above 2 indicates that the company may be overtrading whiles a ratio which is well below 2 means that the company may not be fully utilising its capital. The ratios of SIC life, Starlife, Quality Life, CDH Life, Unique Life, Phoenix Life and IGI Life are below both the industry average and the benchmark. On the other hand, the ratios of StarLife, Vanguard Life and Provident Life are too high. The ratios of Metropolitan Life and Donewell Life are clearly out of range. 32

33 Net Premium to Equity Ratio The Net Premium to Equity ratio does the same function as the Gross Premium to Equity ratio. The only difference is that the Net Premium to Equity ratio measures the relation of the Net Premium and not the Gross Premium of a company to its capital. The industry average rose from 1.2 in 2007 to 1.9 in Table 22: NET PREMIUM TO EQUITY RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited

34 Capital to Liabilities Ratio The Capital to Liabilities ratio compares the liabilities of the company to its capital. A capital to liabilities ratio of 2.5 for an example means for every cedi of equity, the company has 2.5 cedis of liabilities. Table 23: CAPITAL TO LIABILITIES RATIO Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry average capital to liabilities ratio rose from 2.3 in 2007 to 2.5 in Whereas the ratios of Vanguard Life, Donewell Life, Provident Life and Quality Life show signs of overgearing, MetLife and Donewell Life clearly need additional capital injections. 34

35 Underwriting Profit as a Percentage of Gross Premiums Ratio This ratio measures underwriting profits as a percentage of Gross Premiums. It generally tries to ascertain the portion of the gross premiums that is available to contribute towards profits. It is calculated by dividing the underwriting profit by the gross premiums. Underwriting profits for this purpose is defined as net earned premium minus commissions, claims and management expenses Table 24: UNDERWRITING PROFIT AS A PERCENTAGE OF GROSS PREMUIMS Company Percentage (%) No Industry Average Capital Express Assurance (Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana) Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited Almost all Life companies made underwriting losses in both 2007 and This underscores the utmost importance of ensuring the adequacy and efficient management of investments by Life insurance companies. This may also be an indication of underpricing or excessive expenditure by Life companies. 35

36 Investment to Total Assets Ratio Investment to total asset ratio measures the portion of a company s asset that are in real investments and is therefore readily available to be converted into cash to settle liabilities. In a way, it gives an indication of the quality of the company s assets. Generally, the Life companies have better ratios than the Non-life mainly because the Life companies do not have the problem of outstanding debtors which deprive them of investible funds. Table 25: INVESTMENT TO TOTAL ASSETS Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited 84 7 Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited The industry average for both years are well above 70. The ratios of Metropolitan Life, Donewell Life and Capital Express give clear indications of inadequate investments. 36

37 Return on Assets Ratio This ratio measures the return that a company makes on the assets it employs in its operations. It is calculated as the net profit before tax divided by total profits. Table 26: RETURN ON ASSETS Company Percentage (%) No Industry Average Capital Express Assurance(Ghana) Limited CDH Life Assurance Company Limited Donewell Life Insurance Company Limited Enterprise Life Assurance Company Limited Ghana Life Insurance Company Limited Ghana Union Life Assurance Company Limited Glico Life Insurance Company Limited IGI Life Assurance (Ghana)Limited Metlife Insurance Ghana Limited Phoenix Life Assurance Company Limited Provident Life Assurance Company Limited Quality Life Assurance Company Limited SIC Life Insurance Company Limited StarLife Assurance Company Limited Unique Life Assurance Company Limited Vanguard Life Assurance Company Limited -5 7 The industry average dipped from 7% in 2007 to 4% in Whereas the ratio of Enterprise Life can be attributed to good performance, the ratios of CDH Life and IGI Life are all due to capital inadequacy. 37

38 Life Insurance Industry Aggregated Balance Sheet Table 27: LIFE INSURANCE INDUSTRY AGGREGATED BALANCE SHEET AS AT 31 DECEMBER, GH GH Note Stated Capital 47,915, ,639, Capital Surplus 11,594, ,850, Income Surplus 2,888, ,789, Contingency Reserve 1,819, ,191, Shareholders' Funds 64,216, ,471, REPRESENTED BY: Fixed Assets 1 13,782, ,438, Investment Properties 12,987, ,721, Long Term Investments 2 60,111, ,724, ,881, ,884, Current Assets Policy loans 7,650, ,259, Other Debtors/Loans 18,217, ,947, Amount due from reinsurers - 50, Taxation 254, , Short term investments 3 71,352, ,305, Cash funds/resources 9,279, ,395, ,754, ,104, Current Liabilities Provision for unearned Premiums 100, Provision for claims 1,051, , Amount due to reinsurers 122, , Bank Overdraft 471, , Creditors 5,212, ,962, Taxation 82, , Proposed Dividend 420, ,258, ,461, ,248, Net Current Asset/Liabilities 99,292, ,856, Actuarial Liabilities 119,557, ,825, Other Long Term Liabilities 2,399, , ,956, ,269, Net Assets/Liabilities 64,216, ,471,

39 Table 28: NOTES TO THE LIFE INDUSTRY AGGREGATE BALANCE SHEET NOTE 1 - FIXED ASSETS Gh Gh Land & Buildings 6,812, ,412, Furniture, Fittings & Equipment 2,355, ,153, Motor Vehicles 1,520, , Work in Progress 2,313, ,580, Intangibles 39, , Computer Equipment 740, , ,782, ,438, NOTE 2 - LONG TERM INVESTMENTS Quoted Shares 32,452, ,768, Unquoted shares 7,251, ,683, Government Bonds 4,208, ,518, Others 16,050, ,370, Corporate Bonds 148, , ,111, ,724, NOTE 3 - SHORT TERM INVETSMENTS Treasury bills 27,390, ,311, Fixed Deposits 41,154, ,221, Call accounts 51, Unit trusts 1,644, ,569, Bonds 1,110, ,202, ,352, ,305, NON-LIFE COMPANIES Table 29: MAKE UP OF ASSETS GH % GH % Fixed Assets 13,782, ,438, Investment Properties 12,987, ,721, Long Term Investments 60,111, ,724, Investments in in Subsidiaries Policy Loans 7,650, ,259, Other Debtors 18,217, ,947, Amount Due from reinsurers , Taxation 254, , Short Short term term investments 71,352, ,305, Cash Cash funds/resources 9,279, ,395, ,635, ,989,

40 NON-LIFE COMPANIES Claims Ratio The Claims ratio which is the percentage of Claims incurred to Gross Premiums, measures underwriting efficiency. The lower the ratio, the better the underwriting efficiency. Table 30: CLAIMS RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited The industry average claims ratio rose from 16% in 2007 to 17% in Apart from International Energy Insurance and Regency Alliance which are all new companies, the ratios of Phoenix and Glico General are below the industry average for the two-year period under review. Star and CDH recorded significant increases in their claims ratios whiles Phoenix and Global Alliance on the other hand recorded marked increases. 40

41 Expense Ratio The Expense ratio measures management expenses as a percentage of Gross Premiums. The lower the ratio, the better in terms of management efficiency. Table 31: EXPENSE RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited industry average rose from 30% in 2007 to 34% in The ratios of Ghana Unio The industry average rose from 30% in 2007 to 34% in The ratios of Ghana Union, Metropolitan, Quality, Mainstream, Enterprise and Global Alliance were below the industry average during the twoyear period under review. However, the ratios of SIC, Provident, Unique, Donewell and Prime are significantly above the industry average. The ratios of International Energy and Regency Alliance are because they are both new companies and therefore the initial volumes are too low to support the operating expenses. 41

42 Combined Ratio The combined ration is calculated as Total Claims + Total Management Expenses divided by Gross Premium. It is combination of the claims and management ratios. Table 32: Combined Ratio Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited The industry average rose from 46% in 2007 to 51% in However, the ratios of SIC, Provident, Unique, Donewell, Global Alliance and Prime are significantly above the industry average. 42

43 Return on Equity Ratio Return on Equity is the Net Profit after tax as a percentage of Shareholders funds (Equity). It measures the profitability of the companies; the higher the percentage, the more profitable the company. Table 33: RETURN ON EQUITY RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Co mpany Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Co mpany Limited Prime Insurance Company Limited Provident Insurance Company Limited 14 Quality Insurance Co mpany Limited Regency Alliance Insurance limited SIC Insurance Comp any Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited 9 14 industry's average rose from 18%in 2007 to 21% in The ratios of Ghana Union, Star, M The industry s average rose from 18% in 2007 to 21% in The ratios of Ghana Union, Star, MET and Quality recorded the best results with Provident, Donewell and Prime showing the lowest ratios due directly to their rather high expense and combined ratios. As expected, the ratios of all the new companies showed negative results. 43

44 Retention Ratio Retention ratio is a risk management ratio. This ratio measures the percentage of Net Premiums to Gross Premiums. It indicates the portion of the underwritten risks that have not been passed on to reinsurers. Table 34: RETENTION RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited industry average fell slightly from 64% in 2007 to 62% in Whilst the retentions The industry average fell slightly from 64% in 2007 to 62% in Whilst the retentions of Enterprise, Ghana Union, Vanguard and Metropolitan are prudently well below the industry average, those for Global Alliance and International Energy appear too low and cause reasonable concern. 44

45 Investment Income as a percentage of Total Investments Ratio Investment Income as a percentage of Total Investments measures the rate of return on investments. It gives an indication of the quality of the investments made and held by the various companies. The industry average dipped slightly from 10% in 2007 to 9% in Table 35: INVESTMENT INCOME AS A PERCENTAGE OF TOTAL INVESTMENT RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited

46 Investment Income as a percentage of Premiums Investment income as a percentage of Premiums tries to compare a company s income from investment to its premium income. This ratio measures the extent of support from investment income. It indicates both the quality and adequacy of the investments. This is very relevant considering the fact that, most companies make underwriting losses and have to depend on income from investments to make profit. Table 36: INVESTMENT INCOME AS A PERCENTAGE OF PREMIUMS Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited 11 9 The industry average did not change during the two-year under review. The ratios of SIC, Unique and Phoenix are lower than the industry average. However, the ratio of Donewell is too low and actually shows a falling trend. Global Alliance, for the two years, does not seem to have any investment at all which also means another great concern. 46

47 Gross Premium to Equity Ratio The Premium Equity ratios try to assess the capital adequacy of insurance companies. The ratios measure how much capital is available to support the premiums underwritten by a company. Table 36: GROSS PREMIUM TO EQUITY RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited The industry s average for the Gross Premium to Equity ratio fell slightly from1.9% in 2007 to 1.8% in The benchmark or industry best practice is however pegged at 2%. This means that a ratio significantly above 2% indicates that the company may be overtrading whiles a ratio which is well below 2% means that the company is not fully utilising its capital. The ratios of Glico General, Donewell and Global Alliance are higher than both the industry average and the benchmark. On the other hand, the ratios of SIC and Provident are significantly lower than the industry average. 47

48 Net Premium to Equity Ratio The Net Premium to Equity ratio does the same function as the Gross Premium to Equity ratio. The only difference is that the Net Premium to Equity ratio measures the relation of the Net Premium and not the Gross Premium of a company to its capital. The industry average did not change during the two-year under review. Table 37: NET PREMIUM TO EQUITY RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited

49 Capital to Liabilities Ratio The Capital to Liabilities ratio compares the liabilities of the company to its capital. A capital to liabilities ratio of 1.5 for an example means for every Cedi of equity, the company has 1.5 Cedis of liabilities. The industry average for the two-year period under review remained the same. Table 38: CAPITAL TO LIABILITIES RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited

50 Outstanding Premiums as a Percentage of Gross Premiums Outstanding Premiums as a percentage of Gross Premiums compares outstanding premiums as at the end of the year to the total premiums written during the year. This efficiency ratio tries to assess how well management makes use of the company s assets. Specifically, the objective is to find out how long it takes management to collect premium debts and put such funds into use. Table 39: OUTSTANDING PREMIUMS AS A PERCENTAGE OF GROSS PREMIUMS Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited The industry average ratio rose sharply from 34% in 2007 to 43% in The rapid deterioration is adversely affecting the profitability and solvency of insurance companies. This makes the management of credit risk one of the major issues for Ghanaian insurance companies. The ratios of SIC, Unique, Donewell, Phoenix, Prime, Equity and the two reinsurers are dangerously high. 50

51 Outstanding Premiums as a Percentage of Total Assets This ratio measures the outstanding premiums as a percentage of the company s total assets. It is an indication of asset quality. Since trade debtors are not regarded as good quality assets especially where they are quite old, the lower the ratio, the better. Table 40: OUTSTANDING PREMIUMS AS A PERCENTAGE OF TOTAL ASSETS Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited The industry average moved sharply from 25% in 2007 to 29% in This sharp movement is a major source of concern. It is generally believed that the intense competition in the industry is fueling this trend but a much more important issue is the need for insurance companies to formulate effective credit policies to help manage credit risk which is fast becoming the most significant risk in the Ghanaian insurance industry. The ratios of Vanguard, Unique, Donewell, Phoenix, Glico General, Global Alliance Prime, Ghana Re and Mainstream are all well above the already too high industry average. It is important to note that the premium debtors used to calculate these ratios are already net of significant provisions for bad and doubtful debts. 51

52 Return on Assets Return on Asset is defined as the Net Profit After Tax as a percentage of Total Assets. It is an efficiency ratio which measures how efficiently the company make use of the assets under its control to generate returns for the policyholders and shareholders. Table 41: RETURN ON ASSETS RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited 9 International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited 21 Mainstream Reinsurance Company Limited 5 6 Even though the industry average rose from 6% in 2007 to 9% in 2008, Vanguard, Provident, CDH and Phoenix recorded significant dips in their ratios. The ratios of the new companies is indicative of their status as new entrants. 52

53 Investment to Total Assets Ratio This is an asset adequacy/quality ratio. It is intended to ascertain the percentage of the company s total assets that are in the form real investments that can be easily converted into cash to take care of policyholder and other liabilities. Table 42: INVESTMENT TO TOTAL ASSETS RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited The industry average fell significantly from 52% in 2007 to 45% in This is mainly due to the ever rising premium debtors; that is, the inability of insurance companies to collect their premiums and put them in gainful investments. The ratios of Ghana Union, Enterprise, CDH and Metropolitan look quite good. The ratios of Donewell, Prime, Provident, International Energy, Quality and Ghana Re on the other hand are too low. 53

54 Underwriting profits as a Percentage of Gross Premiums This ratio measures underwriting profits as a percentage of Gross Premiums. It generally tries to ascertain the portion of the gross premiums that is available to contribute towards profits. It is calculated by dividing the underwriting profit by the gross premiums. Underwriting profits for this purpose is defined as net earned premium minus commissions, claims and management expenses. The industry average dipped from 4% in 2007 to 2% in It is important to note that the ratios of the new companies were excluded from the average to avoid distortions. Table 43: UNDERWRITING PROFITS AS A PERCENTAGE OF GROSS RATIO Company Percentage No Industry Average CDH Insurance Company Limited Donewell Insurance Company Limited Enterprise Insurance Company Limited Equity Assurance Limited Ghana Union Assurance Company Limited Glico General Insurance Company Limited Global Alliance Company Limited IGI Company Limited International Energy Insurance company Ltd Metropolitan Insurance Company Limited Phoenix Insurance Company Limited Prime Insurance Company Limited Provident Insurance Company Limited Quality Insurance Company Limited Regency Alliance Insurance limited SIC Insurance Company Limited Star Assurance Company Limited Unique Insurance Company Limited Vanguard Assurance Company Limited Ghana Reinsurance Company Limited Mainstream Reinsurance Company Limited

55 Table 44: NON-LIFE INSURANCE INDUSTRY AGGREGATED BALANCE SHEET AS AT 31 DECEMBER, GH GH Note Stated Capital 46,317, ,311, Capital Surplus 55,247, ,202, Income Surplus 38,050, ,822, Contingency Reserve 61,716, ,691, Shareholders' Funds 201,332, ,028, REPRESENTED BY: Fixed Assets 1 46,177, ,699, Investment Properties 15,715, ,509, Long Term Investments 2 57,791, ,651, Investments in Subsidiaries 10,294, ,552, ,978, ,414, Current Assets Outstanding Premiums 114,312, ,105, Other Debtors/Loans 26,702, ,989, Amount due from reinsurers 9,709, ,569, Taxation 530, , Short term investments 3 100,265, ,503, Cash funds/resources 24,000, ,274, ,520, ,887, Current Liabilities Provision for unearned Premiums 65,275, ,912, Provision for claims 27,681, ,770, Amount due to reinsurers 66,157, ,211, Bank Overdraft 933, , Creditors 28,000, ,589, Taxation 8,216, ,764, Proposed Dividend 2,890, ,767, ,155, ,270, Net Current Asset/Liabilities 76,364, ,616, Other Long Term Liabilities 5,010, ,003, Net Assets/Liabilities 201,332, ,028,

56 Table 45: NOTES TO THE NON-LIFE INDUSTRY AGGREGATE BALANCE SHEET NOTE 1 - FIXED ASSETS GH GH Land & Buildings 36,406, ,492, Furniture, Fittings & Equipment 3,277, ,887, Motor Vehicles 2,358, ,206, Work in Progress 2,134, ,854, Intangibles 562, Computer Equipment 1,437, ,258, ,177, ,699, NOTE 2 - LONG TERM INVESTMENTS Quoted Shares 44,895, ,859, Unquoted shares 8,924, ,394, Government Bonds 1,477, ,773, Others 1,068, , Corporate Bonds 1,425, ,635, ,791, ,651, NOTE 3 - SHORT TERM INVETSMENTS Treasury bills 48,353, ,760, Fixed Deposits 48,290, ,220, Call accounts 1,600, , Unit trusts 70, Bonds 1,950, ,391, ,265, ,503, Table 46: MAKE UP OF ASSETS GH % GH % Fixed Assets 46,177, ,699, Investment Properties 15,715, ,509, Long Term Investments 57,791, ,651, Investments in Subsidiaries 10,294, ,552, Outstanding Premiums 114,312, ,105, Other Debtors 26,702, ,989, Amount Due from reinsurers Taxation 9,709, , Short term investments 100,265, Cash funds/resources 24,000, ,498, ,569, , ,503, ,274, ,301, NCLUSION

57 CONCLUSION 2008 marked the heightening of the global financial crises. This brought to the fore the importance of regulation and supervision in the financial sector. As we move forward, the National Insurance Commission should devote more resources to on-site inspection and the adherence of our industry to the core principles of the International Association of Insurance Supervisors (IAIS). It is also important that the industry builds capacity for the insurance of oil and gas as Ghana gets ready for the exploration of oil at Cape Three Points in offshore fields. Public education must also be continued to create more awareness among the public. 57

58 APPENDICES 1. Corporate Information Financial Reports 3. Solvency Guidelines 4. List of Registered Insurance Companies 5. List of Registered Reinsurance Companies 6. List of Registered Insurance Broking Companies 7. List of Registered Loss Adjusting Companies 8. List of Registered Reinsurance Broking Companies 58

59 CORPORATE INFORMATION Board of Directors: Lt. Gen. Joseph Henry Smith Ms. Josephine J. Amoah Mr. William F. Duncan Col. John Armah Okai Mrs. Evelyn Pra-Gohoho Mr. Wilfred Sam-Awortwi Dr. D. N. Tapang Mr. Wilson Q. Tei Mr. Enoch H. Cobbinah Mr. Stephen Kobla Okudzeto Chairman Commissioner of Insurance Secretary: Mr. Ernest Frimpong Management Team: Ms. Josephine J. Amoah Mrs. Nyamikeh Kyiamah Mrs. Emma Araba Ocran Mr. Michael Kofi Andoh Mr. Joseph Bentor Mr. Isaac Buabeng Mr. Martin D. Abayateye Commissioner of Insurance Deputy Commissioner of Insurance Legal Director Head, Supervision Head,Finance & Administration Head, Marketing, Research & External Relations Internal Auditor Auditors: Osei Kwabena & Associates (Chartered Accountants) 71 Palace Street, B. 603/18 North Kaneshie P. O. Box Accra-North Bankers: SG-SSB Bank (Ghana) Limited Merchant Bank (Ghana) Limited Cal Bank (Ghana) Limited Ghana Commercial Bank 59

60 FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2008 Report of the Directors The Directors submit their report together with the audited Financial Statement of National Insurance Commission for the year ended 31 December Statement of Directors responsibilities The Directors are responsible for the preparation of Financial Statements for each financial year which give a true and fair view of the state of affairs of the Commission and of the Profit or Loss and Cash Flow for that period. In preparing these Financial Statements, the Directors have selected suitable accounting policies and then applied them consistently, made judgments and estimates that are reasonable and prudent and followed Ghana Accounting Standards. The Directors are responsible for ensuring that the Commission keeps proper accounting records that disclose with reasonable accuracy at any time the financial position of the Commission. The Directors are also responsible for safeguarding the assets of the Commission and taking reasonable steps for the prevention and detection of fraud and other irregularities. Principal Activities The principal activity of the Commission is to regulate the activities of the Insurance Companies in Ghana. Financial Results The Financial results of the Commission are as summarized below: I ncome 3,047,820 2,140,460 E xpenditure (2,696,563) (2,088,823) E xcess of Income over Expenditure 351,257 51,637 To which is added to the balance brought forward on the Accumulated Fund 1,840,815 1,789,178 Giving a balance carried forward on the Accumulated Fund of 2,192,072 1,840,815 BY ORDER OF THE BOARD OCTOBER, 2009 DIRECTORS 60

61 REPORT OF THE AUDITORS TO THE MEMBERS OF NATIONAL INSURANCE COMMISSION We have audited the Financial Statements of National Insurance Commission for the year ended 31 December 2007 set out on pages 61 to 72 Respective Responsibilities of Directors and Auditors As stated on page 60 the Directors are responsible for the preparation of the Financial Statements. Our responsibility is to express an independent opinion on these Financial Statements based on our audit. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform our audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall presentation of the Financial Statements. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. Opinion In our opinion, proper books of account have been kept and the Financial Statements which are in agreement therewith give a true and fair view of the state of the affairs of the Commission as at 31st December, 2008 and of its excess of income over expenditure and cashflows for the year then ended in accordance with Ghana Accounting Standards and comply with the rules of the Commission. OSEI KWABENA & ASSOCIATES (CHARTEDRED ACCOUNTANTS) APRIL,