Low Insurance Literacy, Misconceptions Hamper Industry Growth
By Praisebell Rosemond Larbi
Deputy Chief Executive Officer of Star Assurance Limited, Armstrong Ameyaw, has identified widespread misconceptions, low public trust and limited understanding of insurance as major obstacles hindering the growth of insurance penetration in Ghana.
Speaking on Zed Decor Live, Mr. Ameyaw said many Ghanaians still struggle to fully understand how insurance works, a situation that often breeds scepticism and discourages people from taking up insurance products. According to him, the lack of basic insurance literacy has contributed to persistent mistrust between policyholders and insurance providers, despite ongoing reforms within the industry.
He explained that for many people, insurance is only associated with paying premiums, without a clear appreciation of the protection and financial security it is designed to offer. As a result, some policyholders develop unrealistic expectations or misunderstand policy terms, which can lead to dissatisfaction when claims arise.
“Insurance is fundamentally about risk transfer. It is a mechanism that allows individuals and businesses to protect themselves against unforeseen losses, whether through accidents, fire, theft, health emergencies or other risks that could have serious financial consequences,” Mr. Ameyaw said.
Mr. Ameyaw noted that insurance companies, including Star Assurance, are increasingly stepping up public education efforts to demystify insurance concepts and rebuild confidence in the sector. These efforts, he said, include media engagements, community outreach programmes and simplified product designs aimed at making insurance more accessible and easier to understand.
He stressed that improving public understanding of insurance is critical, particularly at a time when economic pressures are exposing households and businesses to greater financial risks. With rising costs of living and operational expenses, he argued that insurance should be viewed not as a luxury, but as an essential financial planning tool.
According to Mr. Ameyaw, misconceptions about delayed claims payments and perceived lack of transparency have also contributed to public hesitation. However, he pointed out that regulatory oversight by the National Insurance Commission (NIC) has strengthened in recent years, with stricter guidelines on claims settlement, capital adequacy and consumer protection.
He encouraged policyholders to take a more active role by asking questions, reading policy documents carefully and engaging insurers for clarification before signing up for coverage. “Insurance works best when both parties understand their obligations,” he said, adding that informed customers are better positioned to fully benefit from insurance products.
Mr. Ameyaw further called for collaboration between insurers, regulators and the media to sustain public education on insurance, especially among small businesses and informal sector workers who remain largely uninsured.
He concluded that addressing misconceptions and improving insurance literacy would not only boost confidence in the industry but also strengthen Ghana’s broader financial resilience, as more individuals and businesses adopt insurance as a tool for managing risk and safeguarding livelihoods.
