The insurance penetration remained steady at approximately 1.0% for the past five years, the 2024 Financial Stability Review has mentioned.

However, the traditional way of computing insurance penetration has been questioned by some industry experts.

Therefore, in the years ahead, the National Insurance Commission (NIC) expects growth to be driven by the combined impact of the full implementation of the digitalisation initiatives, innovation, continuous expansive public education efforts by the NIC, and full protection of policy holders as required by the Insurance Act, 2021, Act 1061.

According to the report, Ghana’s insurance industry seem to have somewhat weathered the storm and seeks to emerge as a resilient industry in the face of a rapidly evolving global landscape marked by profound challenges including COVID-19 pandemic, geopolitical tensions, and the Domestic Debt Exchange Programme.

It explained that the resilience of the industry has been supported by improved regulation, supervision and increased digitalisation.

“The burgeoning participation of InsurTech firms in the insurance sector, alongside the ongoing digital transformation initiatives, and the commitment of industry stakeholders to establish and maintain effective corporate governance frameworks, highlight the insurance industry’s progressive growth. This evolution is further supported by the NIC’s dedication to enhancing, refining, and effectively enforcing supervisory and regulatory frameworks. A notable development in this respect is developing a complaints management system to streamline the complaints process and empower policyholders and prospective clients to actively participate in shaping and upholding the insurance industry’s reputation through feedback in the form of complaints and suggestions”, it added.

Equity Base hits GH₵5.52 billion in 2023

Meanwhile, the equity base of the Ghanaian insurance industry recorded a significant expansion in 2023, growing from GH₵4.45 billion in 2022 to GH₵5.52 billion in 2023.

According to the 2024 Financial Stability Review, this remarkable 24.0% ascent reflects the sector’s strong financial resilience and its capacity for sustained growth and adaptation given the rather volatile and dynamic economic environment witnessed these past couple of years.

Such an upswing in equity, it said, not only signals the industry’s robust health but also its potential to leverage opportunities and navigate challenges effectively, ensuring potential long-lasting prosperity and stability for the stakeholders involved.

Insurance Firms Maintains CAR above Industry Benchmark

In 2023, the insurance industry continued to thrive, maintaining a Capital Adequacy Ratio (CAR) well above the regulatory benchmark of 150%.

This achievement underscores the industry’s robust financial health and resilience.

However, the report said it is noteworthy that the life insurance segment saw a marginal decline in its CAR, primarily due to the incorporation of necessary risk adjustments and the effect of the domestic debt exchange programme. These measures, while affecting the CAR, are essential for ensuring the sector’s stability and responsiveness to evolving economic, financial, and insurance landscapes.