Deepening life insurance penetration in Ghana; the role of customer service

Deepening life insurance penetration in Ghana; the role of customer service


Insurance is a key player in the financial space of the country. Undoubtedly, the financial sector, especially the banking sector has experienced some challenges in recent times following the regulatory authorities efforts to strengthen, stabilize and streamline its activities and enhance the sector’s capacity to provide the highest level of service to customers.

Insurance companies if positioned well will be the biggest beneficiaries in the light of the banking reform as per its core mandate of protecting the future financial interests of the insuring public. The National Insurance Commission (NIC) has also confirmed an upward adjustment effective June 2021 of the minimum capital requirements of insurance companies from Ghc15 million to Ghc50 million. This is expected to shore up the capital base of insurance companies to ensure a highly competitive, financially vibrant, robust industry.

Of the many types of insurance, two main forms of insurance are quite predominant to the Ghanaian - Life and Non-Life insurance.

Over the years both have seen a steady growth albeit, a lot more need to be done. According to the NIC, there are 24 Life and 29 Non-Life Insurance companies, Lost Adjusters, Brokers and Reinsurance companies in the country. A news item carried on various news feeds on 17th May, 2019, revealed that the NIC projects insurance penetration to hit 5% by the year 2020. This, unfortunately, is still woefully inadequate considering the huge untapped market and the many yet to sign on any form of insurance.

I do however applaud the efforts of NIC and the Ghana Insurers Association (GIA) about their recent collaboration with Joy FM on its Drive Time segment dubbed "Time with insurers" aimed at creating more awareness and education to sensitize the public about the benefits of insurance and the ease of signing for an insurance policy.

Insurance, essentially is designed to protect against serious financial reversals that may result from adverse random events intruding on the plans of individuals or corporate entities. A contract of insurance is therefore a risk transfer mechanism where for the payment of a premium the cost of loss is transferred to the insurer.

Life insurance for example seek to provide adequate financial assistance (replacement/supplementary income) for the policyholder or their dependents in the future in the event that:

A) The policyholder or their dependents can no longer cope with life because:

(i) He/She suffered a disability from an accident,

 (ii) Suffering from a Dread or dangerous disease like cancer, kidney, Paralysis etc.

(iii) Battling with retrenchment as witnessed in recent times,

(iv) And ultimately death! In all of these unfortunate circumstances, they are more likely to lose their normal income, business and self-dignity.

While Life insurance covers the individual and everyone you love, that of Non-life insurance covers everything you own against unforeseen financial challenges.

It  must however, be noted that some Life insurance policies are designed as short to medium term financial plans with selected maturity periods to meet the immediate financial needs of customers. Your insurance sales professional will make this information available to you to assist you identify a suitable policy.

It is in the light of the above unforeseen situations that life insurance has been designed to mitigate the financial challenges of individuals following the occurrence of any of these exigencies for which one may not have any control or would have predicted. It is much appreciated the efforts of the regulator and its stakeholders on an educational campaign on the benefits of both life and non-life insurance for individuals and corporate institutions as it contributes substantially to the country's GDP growth through taxes and investment funds.

Life insurance customers like any other form of insurance want the following from their insurer:


1. Prompt and fast results. Insurance companies must find ways to reduce waiting time and turnaround by investing in training on product knowledge for its customer service staff.

2. Customers want an easy process especially information on premium payments, surrenders, maturities and most importantly claims. Claims are an integral part of the business of insurance. Indeed, it is at the point of a claim that insurance does become meaningful or tangible to the client.

Therefore, insurance companies must make the claims process customer friendly, easy and fast.

As it is, one of the major causes of the low penetration of insurance in the country is that many Ghanaians think insurance companies do not pay claims. Technically, a lot goes into claims payments. Customer service staff should understand the urgent desires of clients for their money and devise ways on how best to provide quick access to fast track the claim process.


3. Customers want personal attention. Customer service staff need to watch their attitude and body language towards customers and pay attention to customers with courtesy. Customers must be allowed to ask questions and staff should answer these questions truthfully and respectfully.

Insurance companies must note customer service is no longer a luxury but an absolute requirement. Companies need to take care of their customers to achieve service excellence because customer service can define your brand.

Negative communication about your brand in this era of new media will kill the brand likewise positive remarks. Corporate brand image projection do not occur in isolation but together with a well-executed customer service strategy.

4.Keep your brand promise and always deliver on your promises. For example do not communicate prompt payment of claims and deliver the reverse. The Premium and Claim department for instance need to work closely with the customer service department to promptly process claims and provide relevant information on premiums paid and required documentation before claims are due for processing.

5. Customer complaints must be handled expeditiously. Do not run away from complaints, rather, embrace them and react to them positively. Example, information on non-deduction of policy premiums should be readily available to the customer to avoid frustrations when customers are ready to access their claims.

Customer service staff must be trained to see a complaint as a gift, once you are able to deal with a customer’s complaint, the customer comes to the realization that not only do you have the capacity to deliver service well but also the capacity to recover when service failure occurs and that the customer is valued!

6. Communication.

Customer service officers (boundary spanners) must observe proper telephone etiquette especially when customers call on phone to access a service.

It is important to recognize the use of appropriate vocabulary and clarity of speech as a customer service provider. Insurance terminologies such as the Incontestability clauses etc. should easily be explained in everyday English for clients understanding.

Remember effective communication translates into successful customer service. Thus, customer service staff should be trained to communicate effectively with your cherished customers.

7. Use of technology to deploy customer service as some insurance companies have started doing. Beyond collecting insurance premiums via mobile money, customers will better be served for instance through payment of refunds, maturities, surrenders and claims via mobile money. This prevents the customer from undue delays of the cheque clearing process as some insurance companies currently offer.

In conclusion, to achieve deeper penetration, it will be essential for all stakeholders especially the insurance companies to improve on its customer service delivery to complement the work of the NIC and GIA.

This is so because great customer service creates customer satisfaction, increased customer loyalty and most significantly customer referrals and retention!

 Insurance companies must make it the responsibility of every staff member to be on the call to make the customer happy. As Peter Drucker puts it "without the customer there's no business"

In their book Rules to Break and Laws to Follow, Don Peppers and Martha Rogers argued that “customers have memories. They will remember you, whether you remember them or not”. Insurance companies should be aware that a customer's trust can be destroyed at once by a major service problem by a small demonstration of incompetence by their customer service staff.

Source: Ghana| Abdul Ganiyu Bangaham Seidu

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