Insurance penetration in Ghana remained low in 2024, the 2024 Financial Stability Review has disclosed. According to the report, insurance penetration based on gross premiums remained at 1.0% in 2024, the same as in 2023.

However, with the adoption of the Insurance Service Revenue under IFRS 17 (Insurance Contracts), insurance penetration for 2024 stood at 0.63%.

The report stressed that in the years ahead, on the back of digitalisation, innovation, inclusive insurance and public education, insurance penetration is expected to increase.

“Although insurance penetration remained low, insurance density showed an improvement compared to the previous year”, it added.

Meanwhile, insurance density, which measures per capita insurance spending, increased to GH₵202.40 in 2024 from GH₵195 in 2023. This growth primarily suggests an increase in average policy sizes or an improvement in disposable income, reflecting the easing of economic strain on households and businesses.

Retention of Premiums

According to the report, the insurance premium retention for the life segment remained high at 96.36%. This high retention reinforces the importance of robust reserving, sound asset-liability matching, and prudent investment practices to protect policyholder funds and avoid future solvency shocks.

Meanwhile, retention ratios for the non-life segment remained broadly stable.

The non-life retention ratio in 2024 was 73% compared to 69% in 2023.

“The level of the ratio points to the non-life sector’s potential to exhaust local market capacity, decreasing dependence on external reinsurance markets. This would limit the exposure of non-life insurers to global reinsurance price cycles and counterparty risks, while also contributing to reduced foreign exchange outflows, a concern in Ghana’s current macroeconomic environment”, the report alluded.

Overseas Reinsurance Premium Transfers Increased

The report indicated that the overseas reinsurance premium transfers increased.

The National Insurance Commission (NIC) approved GH₵814 million in overseas reinsurance premium transfers in 2024, up from GH₵656 million in 2023.

This increase reflects constraints in local capacity and a growing reliance on foreign reinsurers, with a notable rise in premium remittances denominated in foreign currency.

While offshore reinsurance enhances risk diversification,  the report said it also exposes the industry to foreign exchange volatility and capital outflows, which could heighten systemic liquidity pressures if exchange rate fluctuations become severe.