Ghana’s insurance industry remains underdeveloped despite potential – Deloitte Insurance Outlook

With 50 licensed insurers and reinsurers, and market penetration at just 1% in 2024, Ghana’s insurance industry remains underdeveloped relative to its potential, Deloitte has revealed in its 2025 Africa Insurance Outlook.

However, the professional services firm says the sector has demonstrated resilience and progress in the face of a challenging economic environment.

“The low penetration rate underscores both the scale of untapped opportunity and the structural hurdles that must be addressed to build a more competitive and sustainable market”, it explained.

The West Africa portion of the report authored by Dr. Kwabena Situ, Partner, Assurance and Richard Omari, Associate Director, Assurance, said economic, geopolitical and operational pressures continue to weigh on performance.

“The Domestic Debt Exchange Program (DDEP), currency depreciation and persistent inflation have eroded balance sheets and forced insurers to reconsider their strategies to protect capital and safeguard assets. Remarkably, some players have successfully navigated these headwinds, adapting to the evolving landscape with renewed focus and discipline”.

The article assesses the ‘new normal’ in Ghana’s insurance industry and how insurers are strategically positioning themselves for resilience and growth.

Challenges Faced by Insurers in Ghana Amid IFRS 17 Implementation

While insurers are under pressure to improve underwriting performance and expand regional penetration, the report said compliance, transparency and credibility remain critical priorities for the Ghanaian market. “The implementation of International Financial Reporting Standard IFRS 17 has coincided with macroeconomic shocks that have significantly weakened the sector’s financial position”.

The report pointed out that most insurers incurred substantial losses following the DDEP, EuroBond restructuring, political transitions, inflationary pressures and sharp currency depreciation.

Prior to the government’s debt default, the insurance industry held close to GH₵4.6 billion1 [US$363.86 million] in government securities.

“The DDEP eroded capital reserves across the sector, prompting the Government of Ghana to establish a Financial Stability Fund amounting to US$750 million, to provide capital support to affected financial institutions. In the aftermath, insurers shifted their portfolios toward treasury bills as a perceived risk-free alternative. However, as treasury bill rates declined sharply in December 2024, insurers faced further losses.”, it stressed.

Understanding the ‘New Normal’ Under IFRS 17

The report added that the transition from IFRS 4 to IFRS 17 was a major step forward in how insurance contracts are measured and reported.

Under the new standard, insurers’ profit or loss statements reflect earnings and expenses as they are incurred, rather than on the basis of cash received or paid. Similarly, the balance sheet now provides an accurate picture of the provisions (liabilities) that insurers hold for policyholders and the future benefits that may accrue to the insurers themselves.

The report further stated that key concepts introduced under IFRS 17, including Best Estimate Liabilities (BEL), Contractual Service Margin (CSM) and Risk Adjustment (RA), capture these obligations and expected benefits more transparently.

In practice, premiums are now accounted for, as profits are earned in line with the services provided, creating a clearer link between revenue, performance and value delivered to policyholders.