Robert Dzato
Senior Manager
– Ghana
Tel: +233 302 770454
Email: rdzato@kpmg.com
Sinqobile Hlatshwayo
Manager
Insurance
Tel: +27 67 171 1050
Email: sinqobile.hlatshwa[email protected]
The South African Insurance Industry Survey 2021 - proudly published for more than twenty years | 71
Insurance in the Land of Gold
Current Ghanaian market
There are six primary insurance
regions in Africa. Ghana forms part of
the Anglophone West African region,
with 1.4% of the continent’s GWP
coming from the country.
The country has two main classifications of insurance,
which are Government or state insurance and private
insurance. Few Ghanaians have insurance at present;
however, the market is growing.
The insurance industry in Ghana is regulated by the
National Insurance Commission (NIC) while the Ghana
Insurers Association (GIA) is the trade association for all
companies licensed and registered to transact insurance
and reinsurance business in Ghana.
Over the years, the industry has experienced growth
and rapid increase of private companies and brokers.
According to the NIC 2019 Annual Report, it is estimated
that the industry currently employs over 12,000 people
comprising of agents, brokers, insurers and reinsurers.
Insurance penetration as at December 31, 2019 stood
at approximately 1% which excluded health insurance
and pensions. Including these would increase the
penetration to about 3%.
Market growth
The insurance market in Ghana has seen steady growth
and change over the last number of years, with a GHS
515 million increase in premiums between the 2019 and
2020 financial years.
The growth in the life insurance sector, has narrowed
the gap between gross premiums in the life and non-
life industries. This indicates a significant improvement
in the awareness of the benefits of purchasing life
insurance products in the market.
The industry experienced a marginal decrease of 3.4%
in total profit after tax from GHS 203 million earned in
2018 to GHS 196 million in 2019. Total gross premiums
for insurance was GHS 3.5 billion in 2019; growth of
approximately 21% from GHS 2.9 billion in 2018 while
total reinsurance premium amounted to GHS 302 million.
Sources: NIC report, 2019 (*2019 Audited Accounts unavailable at the time of publishing) KPMG analysis
Non-life
companies
Life
companies
Reinsurance
companies
Broking
companies
Reinsurance
Broker
Insurance
agents
29 22
3
95
5
7000
Premiums (GHS‘ million)
113,79
Glico General
121,65
Star
123,56
Hollard Enterprise SIC
207,06
211,51
Profit after tax (GHS‘ million)
6,60
Heritage
Energy*
6,61
Hollard
6,77
Vanguard* SIC Enterprise
9,32
20,94
Key metrics within the Ghanaian insurance market
Total Assets: GHc 765bn
Lie Sector- GHc 3.85bn
Non-Life - GHc 2.86bn
Reinsurance - GHc 0.78bn
Insurance Intermediaries - GHc 0.16bn
Total Premium: GHc 3.5bn
Life - GHc 1.65bn
Non-Life - GHc 1.83bn
Reinsurance
Premium:
GHc 302m
Average daily
claims incurred by
Non-Life Insurers
GHc 1.4m
Average daily benefit
paid by Life insurers
GHc 2.2m
Total profit for 2019
GHc 196m
72 | The South African Insurance Industry Survey 2021 - proudly published for more than twenty years
According to the latest published NIC report (2019
Annual report), five non-life insurers contributed more
than 50% of the sector’s total assets in 2019. Similarly,
five life insurers contributed more than 70% of the
sector’s total assets.
The non-life sector accounted for 52.3% or GHS 1.83
billion, of the total industry premiums. The two largest
insurers in Ghana, SIC Insurance Limited and Enterprise
Insurance Company, contributed the highest volumes
of business with premium contributions of GHS 212
million and GHS 207 million respectively. The top five
non-life insurers contributed about GHS 1.53 billion to
the industry’s total assets, equivalent to 53%; with the
top ten contributing GHS 2.05 billion representing 72%
of the total assets.
The life sector contributed GHS 135 million;
approximately 69% of the total industry profit of GHS
196 million. The life sector’s share of the industry’s
total premium was GHS 1.65 billion (47.4%). Enterprise
Life led the chart in terms of premium volume with
a total of GHS 437 million in 2019, closely followed
by SIC Life with GHS 355 million. Contributions from
the top 10 life insurance market leaders in terms of
premiums amounted to GHS 1.53 billion representing
93% of the sector’s total premium. The top life insurers
accounted for about GHS 2.90 billion to the industry’s
total assets, equivalent to 75%; with the top ten
contributing GHS 3.52 billion representing 92% of the
total assets for that sector.
Ghana Re continues to be the market leader in reinsurance
with total assets of GHS 541.6 million representing
70% of the total reinsurance assets. Insurance brokers
contributed GHS 138 million representing 86% of the total
assets of insurance intermediaries of GHS 160.7 million
whilst reinsurance brokers contributed GHS21.4m
representing 13% of the market share.
Change and Innovation
“The pace of change and challenges facing the
Ghanaian insurance players means the future is now
more uncertain than ever. Customer experience
transformation and insights from data and analytics will
be a key differentiator for winners” - Frederick Dennis –
Head of Financial Services Audit, KPMG in Ghana.
Industry and products
The number of participants in the industry has
increased steadily over the last number of years; the
market saw a total of 20 industry entries/registrations
in 2019. These comprise of ten new insurance
intermediaries; nine insurance brokers and one
reinsurance broker, in contrast with only five new
insurers in 2018.
Thirty-nine new products and product enhancements
were approved by the National Insurance Commission
in 2019 compared to thirty-five in 2018; thirty relating
to the life insurance sector and the remaining nine to
the non-life sector. One of the nine new non-life sector
products offers cyber-risk cover.
The regulator implemented the Motor Insurance
Database (MID) on 1 January 2020, which is providing
a centralised system from which security agencies
and the general public, including passengers of
vehicles, can check the validity of vehicle insurance
instantaneously using mobile phones.
Challenges impeding insurance
The public’s mistrust of the industry is a key challenge.
The recent banking crisis in Ghana has also contributed
to this to a certain extent. Bad claims experience
encountered by policyholders and a lack of clarity and
understanding of insurance policy documents contributes
to the negative perceptions.
One of the main challenges in the Ghanaian insurance
industry is premium undercutting. Insurance companies
may offer clients unrealistically low premiums in
order to gain a competitive advantage. This denies
well-meaning companies of quality premium charges.
Premium undercutting results in the inability of insurance
companies to pay claims promptly and an increase in
clients' dissatisfaction and a loss of confidence in the
industry. This translates into slow growth for the industry.
The slow development of product distribution channels
has hindered the growth of the industry. There has been
a low adoption of technology and online channels to
allow customers to purchase cover without meeting an
agent in person.
Most Insurance companies in the country are still small by
international standards. Large risks tend to be reinsured
outside of Ghana. Reinsurance premium transfers overseas
have surged almost 400% from 2016 to 2019. As a result,
the weak financial capacity and reinsurance premium
flight hinders the growth of the industry in the country.
Opportunities for growth
The future on the insurance industry in Ghana will
continue to be shaped by several megatrends; regulatory
developments, technology, digitization and customer
experience; and data and analytics.
Regulations Developments
In February 2021, a new Insurance Bill was passed, which
includes the introduction of three additional compulsory
covers: group life for employees, public liability, and
professional indemnity. This is expected to increase the
total premiums for the sector in the coming year.
In 2019, the minimum capital requirement (MCR)
increased effective June 2021. This has been extended
to January 2022 to accommodate for the impact of the
COVID-19 pandemic.
To promote access to the industry to the informal sector
and low-income earners, the regulator has introduced
micro-insurance licences which come with reduced
regulatory requirements.
Technology, digitization and
customer experience
Insurtech is gradually gaining ground as insurers are
digitizing processes and looking to automate core
operational areas e.g. know-your-client (KYC) compliance
and underwriting. Insurers are exploring partnerships
to deploy mobile insurance products to deepen mass
market penetration. Digitisation is top of mind for insurers
with mobile solutions offering viable channels. Given the
very low average age in Ghana, an increase in social and
digital channels is expected. To differentiate on customer
experience, insurers need to understand this younger
generation by leveraging data and analytics capabilities.
Total Assets - Top 5 Insurance Brokers (GHS’ million)
0,0 5,0 10,0 15,0 20,0 25,0
7,0
7,3
15,6
22,8
10,9
KEK
Safety
Ascoma
Edward
Mensah
Willis
Towers
Total Assets - Reinsurers (GHS’ million)
541,6
163,8
72,5
0 200 400 600
Ghana Re
Mainstream
Re
GN Re*
Total Assets - Reinsurance Brokers (GHS’ million)
0,9
1,4
2,4
16,7
0 5,0 10,0 15,0 20,0
KEK Re
Afro-Asian
Re
Visal Re
Global Re
