The youth and the insurance market in Ghana

This morning, in a finance discussion with Kwesi Oduro Boakye of Ampem Boakye and Partners, he made some projections that I was so happy but was a bit worried about the banking sector projections, especially with the indigenous Ghanaian banks.

However, he revealed to me how the new Adinkratimes will serve an impact on the youth market and hope to contribute towards the banking sector growth in Ghana and possibly across the Sub-Sahara. I have always had the belief that the thriving banks in the country with lots of good customers invested in their growth and reach.

I remember a discussion I had with one Managing Director of an insurance firm in Ghana. He recounted how during his student days on the University of Ghana campus, these banks would freely open bank accounts for them. They have saved with that particular bank since the 1990s.

Indeed, the Coronavirus has served us with lots of challenges and has negatively affected the growth of most financial firms. African countries have been greatly hit economically as for this period we have recorded a low ratio of public revenues to GDP, Debt servicing challenges which is absorbing about 22% of revenues of the continent.

According to a report by McKenzie report, the Youth Demographics and young population will be greatly hit as we will in the next few years, face an increase in unemployment and the impact of school dropouts as schools have closed. These challenges are glaring and will stampede on development across the continent. Regardless, it is hoped brands will be able to strategize and scale up to increase productivity and revenue.

Over some time now, Ghana’s insurance sector has seen significant growth. The Insurance market of Ghana is moderately steady with more possibilities and chances to investigate. About 30% of the Ghanaian populace is covered by Insurance.

The total profit that was declared by the insurance industry by the end of 2018 was GHS202 million and that of all-out corporate assessment was GHS 36 million. The complete premium for 2018 in the Insurance business was given as GHS2,937,534,716.

The market is youthful with, 29 non-life insurance companies, 24 life insurance companies, 3 reinsurance companies, 82 Brokerage companies, 4 Reinsurance Brokerage firms and 3 insurance loss adjusters competing in the industry as at December, 2018.1 Insurance penetration as a percentage to GDP in Ghana was below 1.85% at the end of the first quarter of 2016 and 1.2% in the last quarter of 2017.

As indicated by the NIC 2018 yearly report, the all-out resources of the protection business was GHS6.2billion. It was comprised of GHS3.1billion originating from the Life segment, GHS2.4billion from the Non-Life segment and GHS0.7billion from reinsurance. The normal Life everyday advantage paid by life guarantors is GHS1.9 million and day by day asserts acquired by Non-Life organizations is GHS1.1 million. The complete reinsurance premium for 2018 was expressed to be GHS 255million

All these indicators point out the fact that the Insurance market is a green area hence, the need to strategize for greater reach. In the Strategizing for greater reach and revenue increase, the youths should be greatly considered. In our current dispensation, the propagation of globalization, the constant churn of technological innovation and the rise of new-age strategies to markets have become the epicentre of socio-economic development in our world today.

The youth of today have become a very crucial market for many organizations and firms, therefore there is a need for firms to build their brands considering taking into consideration how they communicate to the youth market. The youth or tertiary market is a Generational market, therefore once gotten, they become generational customers.

There is a need for insurance firms to develop marketing and communication strategies targeted to the reach of the Youth market. Effective Strategies that resonate with the young market, effective conferences on insurance education, technological ways of marketing, youth ambassadors and what have you. Recently, some insurance firms like Hollard insurance has taken steps in meeting the demands of the Youth market by introducing their Insurance chat system, Youth insurance Webinars and Youth conferences on Insurance education. All these investments will go a long way to develop the sector and improve the revenue of these firms.

The successful stories many banks and other institutions in Ghana cannot be told without the mentioning of their Youths and Tertiary engagements in the 1990s. The Youth market, once gotten captured becomes a generational market.