Insurance
From The Report: Ghana 2017
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There is strong potential for growth in the Ghanaian insurance sector. The industry is working to design and market products for uninsured populations, including the emerging middle class and those in the informal sector. For its part, the regulator is making efforts to increase capacity among the more than 50 insurance providers, which would allow underwriters to take on larger, riskier policies. Increasing minimum capital requirements are expected to lead to stronger underwriting capacity across the industry, while the development of microinsurance and m-insurance products for citizens on lower incomes will drive further industry growth.

This chapter contains an interview with Lydia Lariba Bawa, Commissioner, National Insurance Commission.

Articles from this Chapter

Overview

Steps forward: The sector is expanding rapidly, while regulator reforms are boosting liquidity and reducing credit risk
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Given the open regulatory framework, continued interest from foreign investors and current low penetration rate, there is strong potential for growth in the Ghanaian insurance sector. The industry is working to design and market products for uninsured populations, including the emerging middle class and those in the informal sector. For its part, the regulator is making efforts to increase capacity among the more than 50 insurance providers, which would allow underwriters to take on larger,…

Interview

State of play: Lydia Lariba Bawa, Commissioner, National Insurance Commission (NIC), on strengthening and expanding the market
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Interview:Lydia Lariba Bawa To what extent is consolidation needed in the country’s insurance sector? LYDIA LARIBA BAWA: In Ghana, there are too many insurance companies relative to the size of the market. With a total market premium of less than $500m, the country has around the same number of insurance companies as Nigeria. The latter has a total premium income of around $1.8bn. A direct effect of the extremely high number of insurance companies is the existence of small, financially…

Analysis

Safety net: The 2008 law increased the role of the private sector in managing pension funds
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The pension market in Ghana traces its roots to the post-independence Compulsory Savings Scheme of the early 1960s, which was the country’s first nationwide pension scheme. Following several amendments to the system, a 1972 decree created the Social Security and National Insurance Trust (SSNIT), which was charged with the administration of the system. In the beginning, funds were held exclusively in government bonds, earning the risk-free rate of 6%, half of which was used to cover administrative…

Analysis

New options: Attempting to address the shortfall in the health insurance scheme’s funding
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Established in 2004, the National Health Insurance Scheme (NHIS) was Ghana’s first step towards a sustainable system of universal health care. In order to provide a social safety net for the most vulnerable segments of the population, the scheme initially targeted lower-income residents, with the intention of expanding coverage to the entire population with time. In the decade since the introduction of the NHIS, remarkable strides have been made in bringing minimum levels of health care to the…

Analysis

Firm moves: Regulatory reform and stricter solvency requirements will strengthen the sector
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The large number of insurers in Ghana – and the high level of fragmentation at the lower end of the market – has led to intense competition and a history of rate-cutting, which has often softened margins and led to higher expenses. This in turn led to a situation where a number of firms were unable to quickly settle legitimate claims, resulting in lower consumer confidence. As a result, the National Insurance Commission (NIC) instituted a series of measures to strengthen solvency and…

Analysis

Affordable coverage: Micro-insurance schemes are reaching new pockets of the population
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With insurance penetration hovering below the 2% mark, authorities in Ghana have been attempting to increase awareness and the percentage of the population that are covered by insurance schemes. Many of these efforts have been directed towards driving the adoption of micro-insurance products, as the government and underwriters see the potential of a largely undeveloped market. Educational programmes and innovative distribution arrangements involving mobile operators are helping to bridge…