Ghana: Insurance industry urged to pursue inclusive insurance for low-income, vulnerable societies
Acting Commissioner of Insurance, Michael Kofi Andoh, has emphasized the importance of collective efforts by stakeholders in the insurance industry to establish sustainable safety nets that empower vulnerable communities to break the cycle of poverty and lead dignified lives through inclusive insurance.
Speaking at the media launch of the 19th International Conference on Inclusive Insurance, Mr. Andoh, also serving as the Chairman of the Local Organizing Committee for the event, acknowledged that closing the insurance gap has become increasingly complex due to challenges such as the COVID-19 pandemic, climate change, and geopolitical events. These developments have disproportionately impacted vulnerable populations.
He asserted, “There is now more than ever before, an urgent need for concerted efforts by all stakeholders to find sustainable safety nets that enable the vulnerable and those at the bottom of the pyramid to break out of poverty and live decent and safe lives.”
Addressing the insurance landscape in Ghana, Mr. Andoh highlighted the establishment of a conducive insurance regulatory framework, coupled with consumer education and capacity building of insurance companies. These measures have resulted in a significant increase in the number of Ghanaians covered by insurance. According to available statistics, the percentage of lives covered by insurance in Ghana has grown exponentially, reaching an impressive 44.6%, up from 29% in 2015.
Despite these encouraging figures, Mr. Andoh noted that the insurance industry’s premium contribution to Ghana’s GDP remains low, standing at just above 1%. However, he expressed optimism that including health and pensions in the coverage would elevate this growth to over 3%.
Also speaking at the launch, Vice President of Munich Re Foundation, Dirk Reinhard, acknowledged the challenging economic climate in many countries and the warning from international organizations about the potential to push a quarter of a billion people into poverty due to climate change and global economic challenges. He highlighted that the most vulnerable communities are often not protected by risk management based on insurance principles.
Reinhard stressed the belief that risk management plays a vital role in sustainable economic development, especially for millions of micro, small, and medium-sized enterprises that are at the heart of many African economies. He expressed confidence in the potential to grow access to formal risk management tools, reduce vulnerability among the most marginalized, and foster economic growth and business opportunities through the International Conference on Inclusive Insurance 2023.
“Those who are affected the most are the vulnerable who are usually not protected by risk management based on insurance principles. We strongly believe that risk management plays an important role for sustainable economic development and for millions of micro small and medium enterprises which are at the heart of many economies in Africa,” he noted.
“We can successfully grow access to formal risk management tools and reduce vulnerability of the most vulnerable and support economic growth and create business opportunities and the International Conference on inclusive insurance 2023 aims at achieving exactly this,” he added.
The inclusive insurance sector has experienced persistent growth in client outreach and premium volumes over the past ten years. New technologies are boosting market coverage. Nonetheless, many people living at the bottom of the pyramid are still without cover or alternative risk management options and climate change is expected to make the situation even worse.
With the global middle class expected to grow to nearly five billion within two decades, we are looking at billions of people who are without a formal safety net from insurance and hence at risk of falling back into poverty.
At the 19th International Conference on Inclusive Insurance, experts from around the world representing NGOs, development-aid organisations, regulation, supervision and policy experts as well as the insurance industry will meet to exchange experiences and discuss the challenges involved in extending risk management solutions based on insurance principles to low-income households and MSMEs.
The mission of the International Conference on Inclusive Insurance (ICII) is to provide a non-profit platform for all stakeholders to present and discuss issues, policies and state-of-the-art solutions for efficient, sustainable and inclusive insurance products by;
- promoting the development and proliferation of good-value insurance for emerging economies;
- raising awareness of the demand for insurance in the low-income segment and its potential;
- providing opportunities for insurance and development experts to progressively develop shared visions and create new partnerships.
The 19th International Conference on Inclusive Insurance takes place from October 23 – 27, 2023 in Accra, Ghana.
