Ghana’s insurance industry regulator, the National Insurance Commission, has partnered Financial Sector Deepening Africa (FSD Africa) – a United Kingdom Aid agency headquartered in Nairobi, Kenya – to provide support to regulators and insurance industry technology firms (more commonly known as Insurtechs) across Africa, to develop an ecosystem for innovation and resilience in the continent’s insurance industry.
In 2022, Ghana launched the Innolab Accelerator programme through which 10 insurtechs went through four months of intensive mentoring on innovative solutions for the insurance industry. Three of those firms – FigTech Ghana, Abisah and Benew – won the prize awards of €20,000 each given by GIZ, the German state-owned international development assistance agency.
This year, the Innolab Accelerator programme includes two Ghanaian firms – Moovon Insure and Mobisure – and the programme’s demonstration day is scheduled for November 16, 2023 in Nairobi.
Ghana’s Insurance Act, passed in 2021 (Act 1061), has also added a new category of operating licence known as the ‘Innovative Insurance Licence’ for innovative insurers and reinsurers, as well as intermediaries such as brokers and agents. These new licences will be granted for a period not exceeding two years, but may be extended. The intention is to develop a regulatory sandbox system to help encourage and promote innovation.
Michael Andoh, Ghana’s Acting Insurance Commissioner, has explained that the new Insurance Act has extensive sections which support inclusive insurance and innovation. He intimates that one of the NIC’s strategic objectives is to build an enabling environment that improves access to insurance, develops the insurance market and increases penetration.
Consequently, the Commission wants to use the sandbox environment as a conduit for testing new innovations over a period of time – in order to make regulatory decisions on whether or not to allow the innovator’s transition into mainstream regulation. He notes that the sandbox licence is essentially a temporary licence, and innovators or insurtechs will have to communicate their exit plans before being admitted into the ecosystem.
The NIC intends to finalise and release its sandbox directive this year, in order to admit the first batch of insurtechs into the sandbox environment.
He praised the industry and noted that, historically, the role of innovators started in 2007 when the NIC issued its first micro-insurance regulations, which indeed were the first micro-insurance regulations in the world, according to A2II. Micro and inclusive insurance have since been broadened, and contributed heavily to the insurance market’s expansion.
He also informed media that the NIC will organise a technology forum in December this year, which is intended to provide tech firms with a brief on challenges confronting the insurance market. It is expected the forum will enable insurtechs and innovators to understand insurance industry dynamics, so they can develop solutions which contribute to transformation of the insurance market.
He thanked FSD Africa and GIZ Ghana for their continuous support to the NIC in building capacity for its staff and providing technical support to the industry.
Elias Mondi, Principal-Innovation for Resilience, FSD Africa, noted that Ghana has continued to be a key player in Africa; and FSD’s support is to assist the NIC in creating an enabling environment for growth and resilience. He assured that FSD will continue to support NIC through the Innolab Accelerator programme for the insurance market’s transformation. He also asserted that supportive regulation is a key tool required in Africa, and thus lauded the Insurance Act for being one of the most progressive and forward-looking regulations on the continent.
