The insurance industry’s equity base and solvency position expanded in 2024.

According to the 2024 Financial Stability Review, equity grew by 31% in 2024 to GH₵6.62 billion from GH₵5.04 billion in 2023.

This growth strengthened the industry’s capital resilience, enhancing its ability to absorb shocks. It also aligns with the industry’s strong solvency position, with average Capital Adequacy Ratios (CAR) for 2024 exceeding the 150% regulatory benchmark.

The life insurers recorded an average CAR of 325%, while non-life insurers reported 390%.

The improved equity base and solvency position reflect prudent capital management, improved underwriting profitability, and heightened regulatory focus on capitalization ahead of RBC implementation.

Despite improvement in solvency position and equity base, the report warned that sector-specific risks persist.

In the life segment, it said solvency remains sensitive to IFRS 17 adjustments and portfolio rebalancing after the Domestic Debt Exchange Programme, exposing insurers to asset quality and discount rate risks.

In the non-life segment, improved solvency partly reflected increased use of reinsurance, lowering direct claims exposure but heightening sensitivity to global reinsurance pricing and counterparty risk.

From a financial stability perspective, these strong equity and solvency buffers provide critical protection against policyholder losses and wider financial sector contagion.

“As the industry braces for the implementation of RBC in 2026, the NIC’s supervision will shift from focusing purely on capital levels to assessing how well capital aligns with actual risks, ensuring that strong capital translates into real resilience and long-term financial stability”, the report added.