Govt Targets Insurance Sector Overhaul to Drive Growth

By Maame Efua Kwaduah

Minister of Finance, Dr. Cassiel Ato Forson, is spearheading efforts to reform Ghana’s insurance industry as part of a broader plan to position the country as a sub-regional hub for insurance services in West Africa.

The government’s renewed attention to the insurance sector forms part of a wider strategy aimed at strengthening financial stability, promoting inclusive economic growth and tapping into the sector’s largely untapped potential.

The Minister’s vision was presented on his behalf by the Chief Economic Officer and Director of the Financial Sector Division at the Ministry of Finance, Louis Kwame Amo, during the annual Education Conference and Exhibition organised by the Insurance Brokers Association of Ghana.

The vision focuses on transforming Ghana into a major centre for insurance services within the West African sub-region.

The reform agenda goes beyond expansion of the industry and seeks to rebuild public confidence, correct structural weaknesses and establish a strong and sustainable framework for long-term growth.

A key part of the government’s strategy is a comprehensive 10-year Master Plan aimed at restructuring the insurance industry.

 The plan is expected to tackle long-standing structural challenges, including low insurance penetration, pricing distortions and a fragmented regulatory environment.

According to the Finance Minister, the plan will serve as a clear roadmap for the sustainable growth of the industry and help attract international insurance companies and investors, positioning Ghana as a preferred destination for insurance business in the region.

The Master Plan comes at a time when insurance penetration in Ghana remains very low despite the presence of many industry players, highlighting the need for reforms that will produce practical results rather than policy discussions.

Digital transformation forms a major part of the reform programme. Government plans to use technology to improve efficiency, increase transparency and streamline operations across the insurance value chain.

The Insurance Sector Strengthening Strategy, which will be implemented over the next two years, is expected to drive digital transformation, strengthen regulation and attract international investment into the sector.

Improved regulation is also expected to address unhealthy practices within the industry, including premium undercutting and weak risk management systems, which have affected the growth of the sector over the years.

By strengthening supervision and enforcing ethical standards, the government hopes to create a more disciplined and competitive insurance industry.

One of the major challenges facing the insurance industry in Ghana is low public confidence. Delays in claims payment, low insurance awareness and perceived unfair practices have discouraged many people from purchasing insurance policies.

The Finance Minister has therefore called on the Insurance Brokers Association of Ghana to play an active role in the implementation of the reform agenda.

Industry players are expected to comply with new regulations, adopt best practices and support efforts to expand insurance coverage across the country.

The conference, which was held under the theme “Building Resilience in a Socio-Political Environment,” provided a platform for stakeholders to discuss practical solutions to challenges confronting the industry and to develop strategies for long-term sustainability.

Mr. Amo also indicated that discussions at the conference focused on adopting best practices and addressing key challenges identified by the Ministry, while commending the cooperation between government and industry players.

Despite the optimism surrounding the reforms, stakeholders have raised concerns about the introduction of Value Added Tax on non-life insurance premiums.

According to Mr. Amo, the policy could increase the cost of insurance for consumers and discourage more people from purchasing insurance policies. Industry players are therefore calling for a review of the policy to ensure that it does not negatively affect insurance penetration.

 With proper planning, effective regulation and strong collaboration among stakeholders, Ghana has the potential to transform its insurance industry into a major driver of economic growth in the sub-region.

The Finance Minister has therefore urged insurance companies and brokers to prioritise customer satisfaction by ensuring prompt and fair settlement of claims.

 He also called on industry players to adopt ethical practices and intensify public education to rebuild trust in the sector.

The President of the Insurance Brokers Association of Ghana, Stephen Kwarteng Yeboah, also acknowledged corruption and malpractice within the industry and warned that such practices could threaten the survival of the sector if not addressed.

He, however, assured that insurance brokers are ready to work with government and regulators to sanitise the industry and restore its credibility.