Interview: Shaibu Ali
Where do you identify major factors underpinning growth in the insurance sector?
SHAIBU ALI: Ghana’s insurance industry has seen satisfactory growth in recent years, with gross premium increasing more than 10-fold between 2010 and 2022. The insurance market is expected to continue evolving, with a high prospect of further expansion due to the untapped markets of various sectors.
Insurance penetration in the country hovers at 1%, with sectors like agriculture – which contributes 54% to GDP and employs about 40% of the population – still largely uninsured. In addition, not everyone has benefited equally from insurance investment and coverage, including women, young people, the informal sector, and rural and impoverished urban areas. This gap presents opportunities for investment in the sector.
In what ways has technology helped deepen insurance penetration in Ghana?
ALI: Insurance is a critical industry requiring significant focus, attention, and investment due to lower levels of technology deployment and employment, compared to other sectors like banking. There have been minimal gains in this area throughout the entire insurance value chain, from marketing to claims.
Local financial technology firms have seen exponential growth, while insurance technology (insurtech) has been slower to catch up. The strides towards closing this gap are promising, and the National Insurance Commission (NIC) is working to create a conducive legal environment for insurtech through The Insurance Act of 2021. Sector players, including insurers, brokers, agents and telecommunications networks, are also enhancing their efforts to deploy technology in the industry.
What strategies can increase insurance coverage among low-income earners?
ALI: The industry should focus on inclusive insurance and micro-insurance to achieve growth in the coming years. This is crucial as it ensures the sector invests in segments that constitute the largest portion of its market, ensuring long-term success. The Ghanaian market predominantly consists of low-income earners working in the informal and agriculture sectors.
To boost insurance patronage among this demographic, it is crucial to lower premium, introduce more bespoke policies, run educational campaigns, and ensure accessible and functional insurance channels. Strengthening the linkages between insurance and technology is also essential for optimal distribution.
How would you assess the data-management protocols of insurance companies?
ALI: The Data Protection Act of 2012 protects individuals and personal data privacy. The Act established the Data Protection Commission (DPC), granting it oversight over the insurance industry. The NIC and the DPC work together to ensure industry members comply with data-protection standards. They conduct regular training for various industry players and associations like the Insurance Brokers Association of Ghana and Ghana Insurers Association. These efforts aim to sharpen industry players’ expertise in managing personal data and ensure that they comply with the law.
Insurers prioritise data-protection protocols in their operating procedures, with breaches subject to repercussions as stipulated in company policies. These protocols are often given board-level priorities, maintaining adherence to industry standards. Industry players, including insurers and emerging technical service providers, undertake regular training, often appointing specific IT, audit, compliance and finance managers as data-protection officers to ensure legal compliance.
The insurance industry acknowledges the sensitivity of its operations, dealing with private client data from on-boarding to claims. As the industry grows, it is expected to focus on improving data-protection issues, since the industry is still in its incipient stage.
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