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Unhealthy competition from rampant premium undercutting within the insurance industry in the country is posing a serious threat to the survival of the sector. Many companies have entered the market without the needed capital but are said to be forcing their way to survive, hence the use of all manner tactics and strategies which do not conform to the rules of the game as per Ghana�s laws. The situation has forced some players in the insurance industry to ask the National Insurance Commission (NIC), the regulator, to get tough at companies that are undercutting premiums in their quest to woo more customers to their fold. According to them, the situation has become precarious and cautioned that if the practice is not checked, it will further dent the image of an industry which is already struggling to win the trust of the mass of the people. The Managing Director of SIC Life, Mr Issa Abdul-Rahman Anafure, said the insurance industry had become highly competitive and has, therefore, opened the floodgate for what he termed �all manner of practices that are against the insurance laws of the country�. Mr Anafure was sharing his thoughts on the industry with the GRAPHIC BUSINESS in an interview. He also touched on how it could grow to attract more people to take up insurance cover. �Insurance premium undercutting has become the order of the day and this is hurting the industry for which reason the NIC must act now before the situation gets out of hand�, Mr Anafure said. An insurance premium is the actual amount of money charged by insurance companies for the indemnifying a risk. An insurance premium for the same service can vary widely among insurance providers, which is why experts strongly recommend getting several quotes before committing to an insurance policy. Insurance agents or brokers will normally take the basic information and calculate an estimated insurance premium based on needs and other risk factors. The lowest quoted price on an insurance premium may be the better bargain, but the level of coverage may also be lower. In spite of this, some of the companies in the country are said to be accepting premiums far lower than actuarially possible to cover a risk and this makes it difficult for them to pay claims in the event of an accident that leads to a claim. Already, the image of the insurance industry in the country is not the best because of the allegations of the refusal of companies to honour their obligations and rather hide behind legalities and clauses in the policies, which they normally hide from the point of selling an insurance product. Some of the companies are said to unduly use their legal departments to intimidate their clients, most of whom have no legal backgrounds or are not knowledgeable when it comes to the dealings of the insurance business. They are, therefore, denied their claims and as a result, lose trust in the insurance system. In Ghana for instance, vehicle owners only purchase insurance policies because of the stringent laws in place to compel them to compulsorily insure their vehicles. In the case of many other properties such as houses and land among other things, the case is different for varied reasons, chief of which is the lack of trust for the companies when it comes to the issue of claims payment. Some of the companies are alleged to show no respect for the rules and regulations of the insurance business in the country and also indulge in premium undercutting, affecting their ability to pay claims Inspectors from the Ghana Insurance Association has since last year been deployed to report companies engaged in premium undercutting for appropriate sanctions to be applied to the offenders. Unfortunately, although the practice persists, there is no report to the effect that any company has been caught in the act. The acting Commissioner of NIC, Mrs Nyamikeh Kyiamah, has been quoted many times to decry the unhealthy practice of price undercutting that has bedeviled the industry but expressed commitment towards utilising resources to ensure the practice ceased. The NIC issued a policy guideline early in 2011 to debar insurance companies from selling policies on credit and also giving as much as 50 per cent discounts on the products. But it seems the directive is not being enforced enough to achieve the desired results.