According
to a report by a UK based IT Solutions, Ghana has one of the fastest
growing insurance industries in the world.
The industry is expected to
grow at a forecast-period CAGR of 23.0% by 2018, supported by an
increase in oil and gas production, the implementation of mandatory fire
insurance for commercial buildings, and an increase in gold production.
With the separation of Life and Non-Life insurance markets, the economy is focusing on strengthening both of these sectors.
With the
recent developments in Ghana including rising public awareness about
insurance benefits, advancements in the regulatory framework, expansion
of the middle class population and acceptance of mobile insurance
products, the Ghanaian insurance industry is driving towards progressive
growth.
Rapid growth in the recent past reveals the huge potential to
grow and can contribute enormously in the national development. Some
veterans in the field believe that the innovative sound methodologies in
the insurance industry can revolutionize the industry and can even
result in twofold growth.
The
emerging technologies, upcoming developments in terms of client segments
and the overall economic expansion in the continent has forced regional
insurers to rethink and has forced the global players to look at Ghana
as a strategic market for growth.
Due to
the budding mobile insurance sector, a steady rise has been seen in the
insurance sales owing to the trust of the general public in the mobile
operators.
With the ever so increasing number of MNOs (Mobile Number
Operators), the insurers have been given a run for their money. With the
advent of providing insurance schemes by the MNOs, people’s attention
has been drifting away from the insurers. The insurance industry is
looking at forming alliances between the masses and the network
providers for staying relevant.
Also,
bancassurance is another booming business of the Insurance sector in
Ghana.
The insurers and banks are actively teaming up in partnerships to
offer a wide range of competitive and innovative products. Bancassurance has always been considered optimistic opportunity when it
comes to helping the insurance industry owing to customers’ trust on
banks and their competitive marketing strategies. Banking institutions
have been performing well in selling insurance that traditional brokers
are starting to feel the pressure.
But even after positive results of
market calculations, the insurance industry is stagnant. Edem Dora
Agbezuge, Relationship Manager, Barclays Bank Ghana Limited, will be
sharing her insights on innovative approaches of the banks and how they
can attract bankers towards selling the insurance products. A growing
number of insurers and banks have joined forces to offer policies
through banking windows; more than 20 banks have already been granted
licences to offer bancassurance products. Another
very important part of this sector is Microinsurance which has received
an increased attention in the recent years. It has been considered as
one of the most viable ‘alternative financial product’ that is delivered
to the unserved and underserved market and the most vulnerable and
marginalised sector.
The affordability of MI products, ease of purchase
and high speed of claim settlement are among the positive considerations
why MI is a viable business line. Adjoa Boateng, Regional Director for
MicroEnsure Holdings, will be joining us to share her in depth industry
expertise with the attending audience about the prospects and shedding
light on the current developments in the sector, the need for tremendous
focus shift to come up with new, competitive and innovative business
models for driving towards growth and sustainability, and to make people
understand the importance of and create awareness about the concept of
microinsurance.
The
National Insurance commission noted with concern that some insurance
companies have resorted to unconventional practices by reporting huge
amounts of outstanding premiums while at the same time making equally
large amounts of provision for bad debts without considerable subsequent
recoveries. This provoked the need for a regulatory framework that
could put a halt over these ill practices.
The No Premium, No Cover
Policy, since its implementation, has been helping in building and
sustaining a more viable and robust insurance sector that can rank and
effectively compete with counterparts globally. Future projections have
stated that the Ghanaian Insurance market will be better placed and
empowered to secure their rightful ranking and recognition within the
Ghanaian economy in terms of contribution to GDP, employment
opportunities, investment outlets and investable fund channels.
The NIC
Non-life insurance sector premium volumes are expected to increase by
2.2 per cent in real terms in 2017 and by 3 per cent in 2018 due to
emerging market growth. Nearly half of non-life covers are generated
from automotive insurance. Almost another quarter comes from health.
Given the relative prosperity in Ghana, the insurance penetration in the
non-life sector is improving, suggesting major opportunity for
expansion.
On the
other hand, the NIC seemed satisfied with the average annual growth rate
of 30% of life insurance in Ghana as well as the change in non-life to
life premium ratio from 60%: 40% in 2010 to 53%:47% in 2014. It has
stressed on the need for insurers and other organizations to protect
their most important resource, which is human capital, through
interventions such as Group Life Insurance.
It is
considered that the life industry depends on the economic growth in
Ghana as it is expected that the increased wealth would trigger demand
for life products. Products are typically centred on group life covers.
The Group Life Insurance is a wonderful opportunity to increase
insurance penetration in Ghana, mainly because a single employer can
purchase a policy cover for a number of employees. The growth in the
life and non-life sectors can be witnessed through the emergence of 23
and 26 in the sectors, respectively.
Agro
Insurance, is another much talked about subject.
Agriculture is a key
sector of Ghana’s economy, accounting for 23% of the national GDP.
Farmers with insurance invest more in agricultural inputs, particularly
in chemicals, land preparation, and hired labour. The cultivation
expenditures go up to more than GHC 250 (US$188) higher for farmers with
insurance, representing a 33% increase relative to the comparison
group.
About 76% of farmers were willing to adopt agriculture insurance
and secure their investments. Thus, showing the growing need to develop
strategic and innovative approaches in agricultural insurance for
farmers to get their compensation as well as counter the unavoidable
phenomenons.
Larger
and complex risks have arisen, requiring insurance protection and
creating product development opportunities.
The broader African middle
class population is eager to protect its valuables and make future
provisions for the same. Plentiful resources, a juvenile and growing
population and the need for investments in infrastructure, energy,
health, education and other basic facilities drive the demand for
insurance protection and reinsurance cessions. Cyber risk is among the
top ten risks facing companies today. And not surprisingly, options for
managing and mitigating various cyber risks are currently an ongoing
topic of discussion.
So far, however, most of the focus has been from an
insurance perspective. But reinsurance clearly has a significant part
to play in confronting this evolving and escalating risk.
In line
with African and Ghanaian insurance sector developments, Trade Essential
is organizing a conference, Ghana Insurance 2017, scheduled 28-29
March, 2017 in Accra, Ghana.
The conference aims to highlight the most
recent Opportunities and Challenges including—Strategies to Increase
Agricultural Insurance Productivity, Bancassurance, Microinsurance, Cyber Insurance & Reinsurance and Climatic changes affecting the
insurance world, Ghana Fire insurance Enforcement, Deposit Insurance Law
and much more.
Ghana
Insurance 2017 conference will offer a platform for policy makers,
regulators, industry executives and researchers from the industry to
keep them up-to-date with the latest industry developments, marketing
strategies, and product innovations relevant for the Ghana Insurance
sector.
The conference is attracting many regional and international
participants to gain insights into the growth prospects for coming
years.
Source: https://tradeessential.com
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