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Ghana's insurance penetration pegged at 1% over five-year period – BoG report

INSURANCE4 Insurance penetration in Ghana still remains relatively low

Mon, 29 Nov 2021 Source: www.ghanaweb.com

The Bank of Ghana has revealed the country’s insurance penetration rate defined as gross premium over Gross Domestic Product (GDP) has remained relatively stable at 1% over the past five years.

According to the central bank’s 2020 Financial Stability Review, insurance penetration, in the near-to-medium term, is estimated to increase following the passage of a number of the new Insurance Bill currently before Parliament.

The BoG report added that recapitalisation of the insurance sector, persistent product innovation from insurance entities and increased public education are likely to increase the insurance penetration rate in the near-to-medium term

Touching on the on-going recapitalisation of the insurance sector, the Bank of Ghana report pointed it expects the move to improve retention of insurance business in Ghana.

“In the year under review, non-life insurers retained 66% of premiums, as compared to 84% by life insurers. The lower retention ratio of non-life insurers was due to the nature of the risks underwritten and the high gross insurance risk ratio,” the report noted.

“At the end-December 2020, overseas reinsurance premium transfers, amounting to approximately ¢229 million, was approved by the National Insurance Commission,” it added.

It continued, “The Motor Insurance Database, introduced in the review year, ensured that sales of insurance policies were not compromised during the pandemic and that premiums generated from motor insurance, were commensurate with the risks associated with the asset insured”

See the full report below:

Source: www.ghanaweb.com