Inclusive insurance not the same as basic insurance – National Insurance Commission clarifies

The National Insurance Commission (NIC) has clarified that inclusive insurance, also known as micro-insurance, is distinct from basic insurance.

According to the NIC, micro-insurance provides tailored products designed specifically for low-income earners, giving them access to coverage in case of unforeseen events.

This type of insurance is targeted at groups like market women, artisans, and food vendors.

In contrast, basic insurance typically includes policies such as car, life, and property, which are more commonly known and used by the general public.

The clarification was made by Dr. Kingsley Kwabason, the CEO of the Insurance Awareness Creation Group (IACG), during the launch of the Inclusive Insurance Certification Programme and Inclusive Insurance Awareness Clinics in Accra.

These initiatives aim to build the required capacities and promote awareness of inclusive insurance across the country from September to November 2024 for the first cohort.

Dr. Kwabason highlighted that Ghana was the first country in Africa to develop a framework for inclusive insurance, but progress in its implementation has lagged behind.

He expressed optimism about the NIC's partnership with the United Nations Development Programme's Insurance and Risk Finance Facility (UNDPsIRFF), aimed at making inclusive insurance more accessible to all Ghanaians.

In his keynote address, the Acting Commissioner of NIC, Michael Kofi Andoh, emphasized the need for the insurance sector to grow, noting that 70% of the national workforce operates within the informal sector and is mostly underserved by current products.

He stressed the importance of developing insurance products that address the needs of this underserved segment of the population.

Andoh also highlighted the critical role insurance plays in making farmers and other informal workers creditworthy.

Linet Odera, the Regional Technical Advisor for UNDP's IRFF, commended the NIC's vision of rolling out the inclusive insurance programme, predicting it would increase the supply of insurance in the country whilst the awareness clinics take care of the demand side.

Dr. Abdul Razak Saeed, Head of Environment and Climate Cluster at UNDP - Ghana, added that inclusive insurance could play a crucial role in mitigating the impacts of climate change and climate-related issues.

He urged the NIC to scale up awareness and build adequate capacity to develop programmes tailored to low-income households and small business owners, ensuring they fully understand the benefits of taking up one form of inclusive insurance or the other.

UNDP'sIRFF Coordinator, Dr. Amina Sammo, expressed her satisfaction with the progress of the initiative.

She highlighted the importance of extending insurance coverage to those who have traditionally been excluded, such as market traders and artisans.