The Chartered Insurance Institute of Ghana had its residential conference at the Rock City Hotel in the Eastern region from the 8th – 11th of December 2021 under the theme, “Increasing Insurance Penetration and Coverage; Role of Regulation, Innovation, and Ethics. Unfortunately, I could not be there but I decided to do a bit of research on the theme.

The services provided by insurance firms make them essential to the economic growth and development of every nation across the globe. Their role in economic development includes but is not limited to the offer of income, life, and property protection to the insured and their keens, as well as income accumulation that can be used at retirement to help preserve the desired lifestyle or living standards. Insurance provides a mechanism for pooling and absorbing the financial consequences of risk by allowing individuals and businesses to engage in activities that otherwise could expose them to undesired loss. In financial intermediation, insurance is one of the principal channels through which funds are collected and transferred to deficit economic units for real investment (Apergis & Poufinas, 2020; Ćurak et al., 2009). There is therefore a positive relationship between insurance market growth and a country’s economic development (Ćurak et al., 2009).

It is a fact that ethics, technology/innovation, and regulation collectively play a central role in the growth and output of many industries of which the insurance industry is no exception (Buchmueller & Liu, n.d.-a; Tiwari et al., 2019). However, despite the immense contribution of the insurance industry to economic growth and development, it is common knowledge that insurance penetration is still very low not only in Ghana but in many economies across the globe. Some of the weaknesses arising from non-compliance with regulatory directives, slow adoption and under-utilization of financial technologies by insurance companies, low actuarial expertise, weak market regime/ rules, and undercapitalization of some insurance firms among others (NIC, 2020). It is important to note that the insurance industry’s contribution to the global economy is still suboptimal, and this research is an attempt to uncover the impact of ethics, regulation, and technology on insurance penetration in Ghana.

The insurance sector contains three sub-components: life insurance, non-life insurance, and reinsurance. In other jurisdictions, it is extended to cover pensions and health. This raises a major concern and going forward, all these classes of insurance should be merged under one umbrella or should be put together when calculating the penetration rate. Life insurance, which includes risk, savings, pensions, and health insurance, is generally considered the most beneficial for the low-income stratum of the population, and thus the most important for driving social and economic development.

Ten years ago, Africa’s GDP share of life insurance premiums was 3.41%—second only to South and East Asia, at 3.77%, among emerging markets. In 2017, insurance premiums accounted for only 2% of the continent’s total GDP, a clear decline in the volume and value of insurance premiums in relation to economic growth and development. In 2018, African economies experienced a GDP expansion of 3.5%, which was slightly below the global average, but insurance premiums expanded ahead of GDP at 4.9% (Signe & Johnson, 2020).

Non-life insurance includes property, transport, and trade insurances, including insurance of motor vehicles and international contracts. Here, Africa was top among emerging markets in insurance premium share of GDP in 2005, at 1.5%, although the rate is roughly like that of Latin America, South and East Asia, and the Middle East, all of which exhibit ratios between 1.2% and 1.46%. In contrast, the premium share of GDP is more than twice as high in the developed world: 3.2% in Western Europe and 5% in North America. With penetration rates of nearly 14%, South Africa continues to dominate the sector (Signe & Johnson, 2020).


A study by (Buchmueller & Liu, n.d.-b) points to insurance regulation as a key element that has led to the deepening of insurance penetration in the U.S.A. The study found evidence that regulatory reforms played a key role in the evolution of health insurance uptake in the U.S.A. The study further highlights the need for insurance firms to adopt innovative approaches, reinforced by state-of-the-art technologies to deliver different products and services that meet the needs and affordability requirements of their clientele. According to (Christine van Heerden & Moroney, 2016) the regulatory environment of a country is a key influence in the insurance market. According to the researchers, a competent regulator supported by sound legislation will instill confidence in the insurance industry, which will increase the demand for insurance. Regulators may also make some forms of insurance compulsory, which results in a higher penetration of those insurance products. Restrictions may be imposed on insurance products and companies by the regulator. This may influence the insurance market in different ways depending on the regulation.


Technology has a similar effect on insurance penetration as regulation. (Tiwari et al., 2019) in their work on Information Communication Technology-Enabled Platforms and P&C insurance consumption in emerging and developing economies, found the adoption and utilization of new financial technologies to be one essential instrument aiding insurance market growth, as it offers companies a competitive edge to penetrate new markets and thus widen their market share through bespoke and speedy client service in areas such as underwriting, product development, marketing, and claims management. Urged by the increasing competition in the insurance industry, insurance companies are becoming increasingly aware of the risks posed by the fast-changing technologies and adopting new strategies to retain their customers.


Insurers sell a promise and trust is more important for insurers than any other type of business. Many insurance policies or products were designed based on the identification of a social need. The primary role of insurance is to assist individuals and organizations. This is the main reason why all insurance practitioners and professionals must therefore adhere to high ethical standards when considering what product, policy, or coverage might be suitable for a given exposure. Insurance professionals also need to consider what premium would be reasonable to charge for the policy or coverage, and whether the purchaser has confidence in the product to solve or meet his/her social need.

An insurance policy is a contract between the insurer and the insured. The contract determines the claims which the insurer is legally required to pay in exchange for payment(s) made by the policyholder, known as the premium.  The insurer promises to pay for loss caused by perils covered under the policy.  “Promises were a lot like impressions. The second one didn’t count for much.” ― Kristin Hannah. This means that the moment you fail to honour your initial promise, doubts arise in the mind of people on the subsequent ones given. Harvey Firestone also said that he believes fundamental honesty is the keystone of business. Insurance companies need trust and honesty to win more people and grow their businesses.

The case in Ghana

Ghana’s insurance industry is beset with a myriad of challenges including non-compliance with regulatory directives, slow adoption and under-utilization of financial technologies by insurance companies, low actuarial expertise, weak market regime/ rules, and undercapitalization of some insurance firms among others (NIC, 2020). According to the National Insurance Commission (NIC n.d), in developing countries like Luxembourg, with a GDP of more than $70Billion, insurance penetration as of 2017 was 38.8%. This is followed by countries like Hong Kong/China and Ireland with an insurance penetration rate of 17.9% and 13.6% respectively. It is, however, surprising that, compared with the peers of these countries in Africa, South Africa has the highest level of insurance penetration (16.99%) followed by Namibia (6.69%) and Lesotho (4.76%) with Ghana hovering around 1% as at 2018.

The downward trend of insurance coverage in Africa as compared to the rest of the developing world have been blamed on several issues by different researchers, including lack of public confidence and trust in the insurance industry (UZOAMAKA 2019), lack of supportive insurance legal framework, inadequate research, uncompetitive pricing, inadequate distribution channels, low-income levels and hostile religious or cultural factors(Odenyo, 2018), non-compliance with regulatory directives, slow adoption and under-utilization of financial technologies by insurance companies, low actuarial expertise, weak market regime/ rules and undercapitalization of some insurance firms among others (NIC, 2020). Though all the findings of these researchers may have a significant impact on insurance penetration, regulation, ethics, and technology may have a profound impact giving their relevance in the lives of modern corporations.

Studies conducted on the insurance industry in Ghana include National Insurance Commission (NIC, n.d) which focused on increasing insurance penetration in Ghana: the challenges and strategies, (Oscar Akotey & Abor, 2013) who studied risk management in the Ghanaian insurance industry, (Ampaw et al., 2018) who studied gender perspective of life insurance demand in Ghana, (Owusu-Sekyere & Kotey, 2019) who worked on the profitability of insurance brokerage firms in Ghana, among other studies. All these projects focused on different research topics other than the impact of insurance regulation, ethics, and technology on insurance penetration in Ghana.

The outbreak of COVID-19 which has truncated direct marketing of products and services has not only worsened the challenges facing insurance firms across the globe but has called into question how insurance companies and regulators are deploying technology to surmount the challenges posed by the pandemic. There is also a need to explore the regulatory reforms that may be necessary to address the challenges posed by the pandemic and to inform the policy direction of the national insurance commission during these challenging times.

Findings to these Challenges

  • Lack of public confidence and trust in the insurance industry – Ethics, professionalism, and technology could be the major factor to help build trust and confidence. The lack of confidence is mostly coming from the failure of insurers to meet the claim of policyholders on time. Insurers should begin to think of new technologies that could help increase speed, transparency and also make cumbersome claim procedures and processes very simple.


  • Lack of supportive insurance legal framework; The National Insurance Commission has done a great job in this regard. A new insurance act, Insurance Act 2021, Act 1061 has assented and this would give the Commission greater power to regulate and supervise all its regulated entities.


  • Inadequate research; we found out that, the National Insurance Commission has created the research unit. This is very good and it’s in the right direction. This also has to be supported by the regulated entities. Research is very key to determining the current and future trends and helping to make proper assumptions. If insurance companies are investing so much in research, they could have eliminated most of the recurring complaints about their services, products, and operations.


  • Uncompetitive pricing; Competitive pricing is the process of selecting strategic price points to best take advantage of a product or service based market relative to the competition. Competitive pricing is used more by businesses selling similar products since services can vary from business to business, while the attributes of a product remain similar. Competitive pricing is generally used once a price for a product or service has reached a level of equilibrium. This is why it is so important that the National Insurance Commission has set the minimum rates especially when it comes to general insurance products. It is for insurers to see the relevance of these minimum rates set and adhere to the directives.


  • Inadequate distribution channels; Distribution channels are the paths that products and services take on their way from the manufacturer or service provider to the end consumer. Traditionally, the channels insurers have used to sell their products were selling directly through their internal marketing officers, agents, and brokers. There has been an improvement and new channels have been added which include selling through corporate institutions like the banks, supermarkets, online shops like jumia, fuel stations, USSD Code, mobile applications, internet, and also through the telecommunication companies. This I might say is a huge improvement. I just think insurers should make noise about these new distribution channels they have created so that people will get to use them.


  • Low-income levels and Hostile religious or cultural factors(Odenyo, 2018); the National Insurance Commission is focused on developing the microinsurance sector. There has been more education to the public and also to the insurance companies on how to develop products to meet the needs of the low-income earners. More of such education needs should continue in our market places and insurers need to find a very simple way to collect the premium. Other insurers have teamed up with the telecoms and they have made payments of premiums easier.

Some insurance companies have products to meet the religious needs of some people. Insurers should be encouraged to create more of such products based on the cultural and religious needs of prospective clients.

In line with aYo’s promise to guarantee the safety of its customers in case of any eventualities, a total of GH¢2,421,787 claims have been paid to more than 8,000 people since the outbreak of the Covid-19 pandemic. In 2021 alone, 8,405 customers received a total of over GH¢2.5million funeral and hospital cash benefits.

Since its inception, aYo Ghana has leveraged the wheels of technology: through the use of mobile phones and tailor-made insurance products to penetrate the insurance market which has persistently had a low penetration rate to make insurance accessible to all classes of people, including low-income earners, underserved communities, among others in Ghana. Over six million MTN subscribers are now covered by aYo. (B&FT online, 2021).


  • Non-compliance with regulatory directives; come to think of it, technology makes supervision easier. A clear example and which is a huge plus for the National Insurance Commission is the introduction of the Motor Insurance Database. It makes it very easier for the regulator to check the underwriting considerations and the premium of motor insurance by the insurer without even visiting them at their premises to embark on an onsite inspection. This is helping to eliminate the motor underwriting issues like undercutting of premiums and other malpractices. Imagine there was a system like that for insurance claims handling. one would be able to enforce the claims guidelines to the latter and this would enhance public trust and uptake of insurance. I would love to say that, the National Insurance Commission has done well and should continue to do more.


  • Slow adoption and under-utilization of financial technologies by insurance companies; it’s impressive to see how some insurance companies are moving digital. One of my policies matured and I might say that I never step one foot in the office but I had my money. I did everything online and my money was paid into my account. The sad thing is that I had to endure deduction for continuous three months because the system has been programmed in such way? I beg to differ. If my premium will continue three months after maturity, why don’t you start the process three months after maturity? Do not give room to excuses you can control. Some insurers are also very far behind when it comes to technology. Policyholders are still not able to view their statements, receive messages when deductions go through or not, and not be notified when their policies have lapsed. The no-life insurance claims procedures are still cumbersome for small own damage claims for some insurers. Insurers need to invest heavily in technology and when they do, they should not neglect cyber risk mitigation measures.  


  • Low actuarial expertise; Young Insurance professionals with talents need to be identified and sponsored to take up courses in these areas and other areas as risk management, cyber risk, etc. Provisions should be made to deliberately train people to occupy certain technical areas of the industry.


  • Undercapitalization of some insurance firms among others (NIC, 2020); the National Insurance Commission announced the recapitalization plan which is to begin next year 1st of January 2022. All existing insurers are supposed to meet a minimum capital of 50million from 15million. The National Insurance Commission (NIC) has revealed that most insurance companies have recapitalised, ahead of the 31st December 2021 deadline in meeting the minimum capital requirement of ¢50 million. This is in the right direction and would help build a stronger insurance industry.





The insurance Penetration rate indicates the level of development of the insurance sector in a country. The penetration rate is measured as the ratio of premium underwritten in a particular year to the GDP. (Economic Times). The insurance penetration remains low and unchanged in Ghana, according to the latest Bank of Ghana’s Financial Stability Review 2019 but despite this, premium income has increased. All that this means is that other sectors of the economy are also increasing.

The Ghanaian insurance industry is actually on the right track. If the industry stays on this track and adds a little speed to the novel activities they are implementing, insurance coverage and penetration would increase drastically.



The writer is a Chartered Insurance Practitioner and an Associate of the Chartered Insurance Institute of United Kingdom and also Ghana (ACII-UK, ACIIG), and holds MPhil in Enterprise Risk Management and Business Consulting from Kwame Nkrumah University of Science and Technology. Attained Bachelor’s degree from University of Ghana, Legon and have Applied Insurance studies, Diploma and Advanced Diploma (AAIS & AIS) from Ghana Insurance College / Malta Insurance Training Institute.

Justice Peprah AGYEI








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About the Author
Justice Peprah Agyei
Chartered Insurance Practitioner || MPhil || CPCU|| ACII || ACIIG || BA (Hons) || Writer   The writer is a Chartered Insurance Practitioner of United State of America, USA, United Kingdom, UK and Ghana (CPCU, ACII, ACIIG), and holds MPhil in Enterprise Risk Management and Business Consulting from Kwame Nkrumah University of Science and Technology, attained Bachelor’s degree from University of Ghana, Legon and have Applied Insurance studies, Diploma and Advanced Diploma (AAIS & AIS) from Ghana Insurance College / Malta Insurance Training Institute with 15years industrial experience. His interest lies in insurance, risk and data analysis. Justice Peprah AGYEI, CPCU, ACII, ACIIG, MPhil, BA (0208498571) Follow and Like "Talk Insurance with Justice" on LinkedIn and also "The Insurance Classroom" on Facebook and YouTube to learn more on insurance.