Liberia: Taking Aggressive Fresh Look at Regulatory Framework of the Insurance Industry
MONROVIA – Mr. Saye D. Gbalazeh, who is the immediate past President of the Liberia Insurance Association is recommending the establishment of an independent commission to regulate activities in the insurance sector to enable it to attain its fullest potential and contribute meaningfully to national development.
Speaking at the recent West African Insurance Companies Association 2022 Education Conference (WAICA), Gbalazeh called for urgently expediting efforts toward reforms to make the regulatory environment within which the insurance industry operates independently operative and separate from the Central Bank of Liberia, whose original mandate is to regulate banking activities.
By Henry Karmo
According to him, the ease of doing business in current structural insurance zone challenges insurance companies and organizations to act swiftly in transforming how the insurance industry is integrated.
“For example, the African Continental Free Trade Area (AfCFTA) presents an excellent opportunity for driving growth in the African insurance sector. When we consider that Africa, a continent of some 1.3 billion people, has an insurance penetration rate of one percent and that Liberia is at the tail end of this, there is a need to take an aggressive fresh look at the regulatory framework of the insurance industry. Moreover, we must take advantage of (AfCFTA). AfCFTA supports regulatory harmonization and integration to drive growth nationally and regionally.”
This year’s conference, which is being hosted by Liberia, is held under the theme: “Managing Transitions and Succession Plans in Corporate Governance in the West African Region: Theory and Practice.”
He also said after a period of turmoil from 1989 –2003, Liberia has entered a new era in which the country has enjoyed stability and peace for nearly two decades, nurturing a democratic culture in which regular elections have become the norm.
“Before the 1990s, agriculture accounted for about 70 percent of the country’s labor force, while mining accounted for nearly 40 percent of the country’s GDP. The insurance sector was largely underdeveloped, with its potential not considered in those years.
“As the country has entered a new era, with the African Union and ECOWAS Commission emphasizing the service sector, the insurance industry is becoming attractive and vital to overall economic development.”
Like the General Conference, the Annual Educational Conference of WAICA is a rotational event held each year. This event brings together insurance actors, including insurance industry executives, marketing executives, media executives, and global reinsurance company representatives.
Various authoritative scholars provided their professional perspectives on the sub-topics to be discussed. It was a time for lessons and knowledge-sharing, during which emerging trends in the insurance industry are assessed, and the sector’s significance to the growth, development, and advancement of various economies are reinforced.
The WAICA Annual Educational Conference allows the host country and participants to find practical solutions to some of their common challenges and acquire knowledge on evolving trends in the industry. These include global best practices and critical reform initiatives to improve the regulatory environment and make the sector reach its fullest potential.
The attending delegates and a team of panelists debated the content of the presentations to develop a conference resolution.
The Annual Educational Conference also allowed governments and industry players to interact and find areas where consensus can be reached in advancing much-needed reforms. This edition of the educational conference is being held at a time when the global economy faces new challenges posed by the Russia–Ukraine War, rising inflation, and other domestic issues.
Despite these global and local challenges, a low penetration rate below 1%, the insurance industry in Liberia continues to make strides and contribute significantly to national and economic development through employment, facilitation of international trade through imports and exports, public policy, risk management, and investment stimulation through premiums deposits in banks.
The premiums generated in 2021 and 2022 in Liberia were over 75.0 million United States dollars. Out of this amount, the industry remitted to government revenue 2% in advance tax, 15% in withholding tax on exportable premiums, and 25% in corporate tax on gross profits. The industry’s contribution to employment is reflected in the Quarterly Employment Statistics that the Ministry of Labor generates. The sector employs over 400 permanent Liberian workers and offers scholarships for technical capacity building.