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Government will later this week likely announce the reversal of its earlier directive prohibiting state agencies from doing business with non-state-owned insurance companies. This follows what government sources termed �fruitful discussions� between the Chief of Staff, Mr Prosper Bani and national executive of the Ghana Insurance Association (GIA) and some other government officials at the Flagstaff House in Accra on February 7. The association is hopeful that following the fruitful deliberations with Mr Bani and other senior government officials, the directives is expected to be reversed. In a petition to the President last week, members of the GIA and the Ghana Insurance Brokers Association (GIBA) described the directive as a discriminatory order which sought to preclude private insurance companies from participating in the insurance business of government. They have, therefore, petitioned President Mahama to reverse the directive in the interest of the growth and development of the insurance industry in Ghana. The President of the Association, Kwame Gazo Agbenyadzie, told the GRAPHIC BUSINESS that the directives by the government could have repercussions for the industry. The petition to the President read in part that �It is our respectful opinion that the current directive is completely at variance with the positive efforts that your government is making to promote the private sector, which is touted as the engine of growth.� Unfair competition The directives would have meant that the Ministries, Departments and Agencies (MDAs) would only have to insure with only SIC. This will mean that MDAs will not have the opportunity to protect their interest even if they receive poor service from SIC or any insurer wholly or partially owned by the state. In short, MDAs could be victims of poor services, the GIA opined. The monopoly will mean that SIC may charge higher and unfair premiums because no other insurer can offer competitive premium rates and discounts the MDAs. Such exclusive rights, the GIA say, will not give SIC the drive to introduce efficiency into its operations, and this could have serious effect in terms of poor claims setdement which will be detrimental to the smooth functioning of MDAs. Insurance brokers who have been rendering useful services to MDAs will also be disadvantaged because SIC may easily rely on the absence of competition to prevent or minimise the use of brokers. The lack of competition will also have an adverse impact on innovation and customization of products and services to the unique needs of MDAs and their employees. SIC�s market share SIC Life Insurance and SIC Insurance Company have been the market leaders in both the life and general business portfolios respectively for several years. In 2012, SIC Life generated gross premium income of GH�100.3 million, representing 28.2 per cent of the total life premiums generated by 18 life insurance companies. In the same year, SIC Insurance Company mobilized gross premium income of GH�109.96 million, representing 22.2. per cent of the total gross premium income generated by 24 non-life (general business) insurance companies. These market shares still make SIC the leading insurance company in both life and general business portfolios. Insurance analysts have questioned the issuance of the government directive without the necessary amendment to the existing insurance law. The GIA had earlier threatened to go court to get the directive reversed, but the intervention of the government is likely to excite members of the insurance association.