Ghana is one of the African countries with the most attractive mix of risk and opportunities for the insurance industry, a survey of seven key markets in East and West Africa by EY (Ernst & Young) has found.

The survey examined 125 insurance executives and regulators in the East African countries of Kenya, Malawi, Tanzania, Uganda and Zambia, along with two West African countries Ghana and Nigeria.

According to the study, there is huge potential for both life and non-life insurance products due to significant population growth and rising demand, rising incomes and the relatively low penetration of life and non-life insurance products.

The report notes that Sub-Saharan economies are among the fastest growing in the world and the outlook for the region’s GDP growth is strong despite falling commodity prices and the slowdown in China’s economic growth.

Fast-growing cities such as Lagos and Nairobi, along with many others in the region, are expected to record sustained growth in population and urbanization, and the independence and self-reliance as societies urbanize, would generate more need for insurance.

Low insurance penetration in the region, currently less than three per cent of GDP, and rising affluence and more disposable income among the middle class, are also expected to increase demand for insurance products.

Expectations for insurance demand growth were highest in Ghana among the countries, with 94 per cent of the survey respondents citing consumer demand as the main driver of insurance growth.

Across the seven countries, survey respondents ranked consumer demand as a driver of the industry, above 50 per cent.

Technological interventions are also expected to drive growth, notably cross-industry collaborative insurance products and online and mobile underwriting platforms.

“While the insurance outlook for Sub-Saharan Africa is undeniably bright, insurers must be prepared to seize the opportunities. Face-to-face sales, through skillful agents and knowledgeable brokers, will still carry the weight of insurance sales in the region in the medium term,” the report says.

“In all seven markets, agents and brokers account for at least 50 per cent of policies sold, because consumers still need to be educated as to the importance of insurance coverage,” it adds.

The availability of talent meanwhile, is the number one challenge identified by respondents in the survey.

Shareholder demands and volatility of returns for shareholders, was the second challenge, followed by technological capacity, distribution and sales, regulation, culture and education of customers, and innovation.