According to the latest Financial Stability Review, Ghana’s insurance sector has maintained a steady insurance penetration rate of approximately 1.0% over the last five years.

Yet, some industry leaders are challenging the traditional approach to measuring insurance penetration, suggesting it may not fully capture the sector’s potential growth trajectory.

The National Insurance Commission (NIC) projects that digital initiatives, public education, innovation, and stronger protections for policyholders under the Insurance Act of 2021 will help drive industry expansion in the coming years.

Ghana’s insurance industry has proven resilient amid global turbulence, navigating challenges from the COVID-19 pandemic to domestic fiscal reforms, including the Domestic Debt Exchange Programme.

The report attributes this stability to improved regulation, increased digitalisation, and enhanced oversight.

The rise of InsurTech firms, ongoing digital transformation, and the NIC’s regulatory enhancements underscore the industry’s commitment to modernisation, the report notes.

The NIC is developing a complaints management system to better handle feedback, allowing policyholders and prospective clients to influence industry standards.

In financial metrics, the Ghanaian insurance sector showed substantial growth, with the industry’s equity base jumping 24% in 2023, from GH₵4.45 billion in 2022 to GH₵5.52 billion in 2023.

This gain highlights the sector’s financial resilience amid economic volatility and underscores its ability to capitalise on growth opportunities.

The insurance industry also maintained a Capital Adequacy Ratio (CAR) above the 150% regulatory benchmark, showcasing its financial health.

However, the report notes that the life insurance segment experienced a slight CAR decline, primarily due to necessary risk adjustments and the impact of domestic debt restructuring.

These changes, while lowering CAR, are seen as critical for the sector’s long-term stability amid shifting economic conditions.