Ghana’s Insurance Sector Still Struggling to Grow Despite Resilience, Says Deloitte Report
Ghana’s insurance industry remains significantly underpenetrated despite signs of resilience, according to Deloitte’s 2025/2026 Africa Insurance Outlook report.
The report highlights that with 50 licensed insurers and reinsurers and market penetration at just 1% as of 2024, the sector is underdeveloped relative to its potential, even as it continues to withstand a challenging macroeconomic environment.
Deloitte notes that the low penetration rate reflects both substantial untapped opportunities and deep-rooted structural constraints that must be addressed to build a competitive and sustainable insurance market.
“Economic, geopolitical and operational pressures continue to weigh on performance,” the report stated, citing the impact of Ghana’s Domestic Debt Exchange Programme (DDEP), currency depreciation and persistent inflation on insurers’ balance sheets.
According to the report, these shocks have compelled insurers to reassess their strategies to protect capital and preserve asset value, although some firms have demonstrated resilience by adapting to the evolving operating environment.
The report further underscores that compliance, transparency and credibility remain critical priorities for the sector, particularly as insurers seek to improve underwriting performance and expand beyond domestic markets.
It also points to the implementation of International Financial Reporting Standard (IFRS 17), which coincided with macroeconomic disruptions that weakened the financial position of many insurers.
“Most insurers incurred substantial losses following the DDEP, Eurobond restructuring, political transitions, inflationary pressures and sharp currency depreciation,” Deloitte noted.
Prior to Ghana’s debt default, the insurance industry held approximately GH¢4.6 billion (US$363.86 million) in government securities. However, the DDEP significantly eroded capital reserves across the sector, prompting the establishment of a $750 million Financial Stability Fund by government to support affected financial institutions.
In response to these losses, insurers shifted investment portfolios toward treasury bills, widely considered a lower-risk asset class. However, declining treasury bill rates in December 2024 resulted in further financial strain.
Inflationary pressures have also intensified cost burdens. With inflation reaching 23.8% in December 2024, the Ghana Insurers Association proposed a 10% increase in motor insurance premiums to cushion rising operational costs. The National Insurance Commission, however, suspended the proposal, citing broader economic pressures on consumers.
Currency volatility remains a major concern for the industry. Deloitte notes that between 2022 and 2024, the cedi depreciated at an annual rate exceeding 19%, significantly higher than the 9.4% average recorded between 2001 and 2021. The sharp depreciation has effectively doubled operational costs for insurers, further weakening underwriting performance.
Despite these challenges, the report suggests that the evolving landscape presents an opportunity for insurers to reposition strategically, strengthen risk management frameworks, and leverage innovation to drive long-term growth.
