While development specialists agree there is no panacea that can produce economic development, the inclusion of increasingly larger numbers of people into the financial system has certainly been a key factor in the development of emerging markets. One of the main ways of achieving this has been to find increasingly innovative means to access previously isolated or informal customer segments, and rendering products and services more accessible. Mobile banking has been one of the most-lauded forms of this, particularly in Africa, following the success of Safaricom’s M-Pesa programme in Kenya. While the results of that product have been tough to replicate in other economies, there still has been a broad shift towards finding ways so that the financial sector can use non-traditional methods to reach out to clients.

In Ghana, one of the most notable channels has been the provision of microinsurance via mobile phones (see analysis). By the very nature of the product and the target clientele, microinsurance’s focus on customers that have been traditionally excluded from the formal financial sphere means that alternative distribution channels are necessary. However, while mobile phones remain a popular format for accessing formerly marginalised segments, there are a number of other ways in which insurers are either currently or potentially considering reaching out to new retail and small and medium-sized enterprise clients.

AGRICULTURE: Given the inherent nature of agriculture as a rural activity, and the fact that it is largely conducted by lower-income, smallhold farmers, building up clients for the Ghana Agricultural Insurance Pool is a challenge. There is scope for insurers to work with other bodies that are already in close contact with a dispersed rural customer base, including the government-run Ghana Cocoa Board ( COCOBOD) and the Kuapa Kokoo Farmers Union (KKFU).

The COCOBOD network includes 1m farmers for whom cocoa is the primary source of income, while the KKFU is a collective of more than 60,000 cocoa farmers. Although COCOBOD has the kind of scale and scope that would seemingly make it an ideal partner organisation for the insurance industry, the fact that it relies on third-party buyers means it doesn’t have as much contact with the target group as insurers might need. As one such COCOBOD-authorised buyer, the KKFU is a large collaborative body that directly involves some 20,000-60,000 cocoa farmers spread across 57 districts located within five Ghanaian regions.

The KKFU thus has both a clearly defined market and credibility that would assist it in promoting the provision of insurance services. Indeed, the organisation already offers its members a credit union and other such services. Nonetheless, COCOBOD could play a supportive role in spreading insurance penetration among organisations like the KKFU. Other agricultural associations, such as the Ghanaian branch of the West African Cashew Initiative, have conditions similar to those which affect COCOBOD.

BEATING DROUGHT: In October 2012 some 136 farmers became the first-ever beneficiaries of claims made under the Drought Index Insurance Product, part of the new Ghana Agricultural Insurance Pool. In all, some 500 farmers were involved in the programme.

The Drought Index Insurance Product was first tested with maize farmers in Ghana’s Upper East, Upper West and Northern regions in 2012. Today, the programme has been extended to include the Brong Ahafo, Ashanti and Eastern regions.

In 2013 the scheme was opened to sorghum farmers, as well as those seeking protection against flood damage to crops. There are plans to expand the coverage further, and in November 2012 Ghana’s Ministry of Food and Agriculture reached an agreement with the Overseas Private Investment Corporation, which is providing $119.5m to support the further development of risk insurance.

In developing its crop insurance programme, the first of its kind in the ECOWAS region, Ghana has modelled aspects of its agricultural insurance policy on similar approaches in the Philippines, a country with which Ghana has developed a formal partnership programme to support the development of its insurance sector. The Philippines has a successful crop insurance programme subsidised by the government, something which, given the cost sensitivity of Ghana’s farmers, may be considered in the West African republic.

BY POST: One means of reaching smaller towns and rural communities in emerging markets that has become increasingly popular with financial providers has been the postal service. In North Africa in particular, banks and insurance firms have begun offering service windows in postal offices, and in some cases, the postal service itself has begun opening wholly owned banking subsidiaries.

The Ghana Post has some 350 post offices and 300 postal agencies located across all of Ghana’s districts, and a number of financial firms are looking to take advantage of that physical branch network. In June 2013 the Ghana Post and Star Microinsurance Company launched “Abusua Nkyemfa”, a new programme to sell microinsurance. Under the terms of the agreement, the Ghana Post has agreed to provide supervision and office space for Star Microinsurance agents.

COMMUNITY-BASED: Ghana already has a strong tradition of financial services in the informal sector represented by susu collectors. Susu collectors are traditional microfinanciers who offer low-value advances or short-term credit and collect deposits. In doing so, susu traders develop close relationships with their customers. The Ghana Cooperative Susu Collectors Association (GCSCA) includes some 4000 members who provide services to perhaps as many as 700,000 clients. The bulk of the GCSCA membership is located in the southern half of the country.

In March 2013 a representative of Star Microinsurance held an open information session for susu collectors about potentially offering their customers Star Microinsurance services. Such a move would expand the potential clientele and services of a susu collector, as well as allow the collector to earn extra income, while also offering insurance vendors trusted access to thousands of new clients. Although the sector has been largely informal and poorly regulated – susu collectors are licensed by the local police rather than the Bank of Ghana – the GCSCA is trying to develop industry standardisation, and members are already required to provide a monthly report to the organisation. Furthermore, other traditional organisations and actors, such as funeral directors, offer additional routes to market as they already have strong local knowledge and the community’s trust, which would make the provision of insurance products credible.

BUNDLING: Based on the belief that users of one financial service or product are more likely than nonusers to purchase another, the bundling of insurance products is an additional area in which potential economies of scale can be achieved.

For example, in 2012 Colina Insurance rolled out a life insurance product bundled with the Bank of Africa’s Ambitious Savings Plan. Bundling could also work in conjunction with insurance companies operating under the partially privatised tiers of Ghana’s Social Security and National Insurance Trust.

As Tawiah Ben Ahmed, the CEO of Colina Life Ghana, told OBG, “One potential for bundling would be to develop a product wherein life insurance could be embedded into private pension schemes in such a manner that is beneficial to the contributor. Similar bundling potential exists with bundling life insurance in conjunction with vehicular insurance policies.”