The National Insurance Commission, which regulates Ghana’s insurance industry, has organised a one-day forum on the new Insurance Act, which provides the regulatory and operating framework for the design and delivery of insurance products and services in the country. The forum was organised in collaboration with Financial Services Deepening (FSD) Africa, a Nairobi-Kenya-headquartered institution that aims to increase inclusiveness with regards to access to financial services across the continent. It was held under the theme ‘The New Insurance Act – Unlocking the Insurance Industry Potential via Innovative Technology’.
The NIC is assiduously seeking to significantly increase insurance penetration in Ghana, which official data still puts at a mere 2 percent of the population, comparing unfavourably with even the poor 3 percent penetration rate for Africa as a whole. While the recent advent of micro-insurance in Ghana has in actual fact doubled this penetration to about 4 percent – some six million people in Ghana have some form of (non-health) insurance cover out of the 31 million national population, about half of those covered only enjoy very limited cover, such as hospitalisation expenses cover.
The pivotal strategy being employed by the NIC – with support from FSD Africa – is the use of digital technology to design and distribute innovative insurance products and services more widely and more cheaply, increasing both the relevance of and access to insurance among households and businesses nationwide. To do this, the NIC has begun licensing ‘Insuretechs’, which are technology companies that specialise in leveraging on digital technology to design and distribute innovative insurance products and services. The Insuretechs are allowed to operate under a ‘sandbox’ framework through which the NIC grants them two year temporary licenses to develop and test technology-driven insurance products on a limited scale. If the results of the test run are acceptable to the regulator, such companies would then be granted full licenses to roll out the accepted products to the market as a whole.
Michael Andoh, Acting Commissioner of Insurance, asserts that insurance technology companies must develop innovative solutions to help address the challenges hampering insurance cover delivery to expand insurance penetration and coverage. He points out that technological solutions can be found to the challenges of reaching remote parts of the country, the speed of claims processing and payment and the overall cost of insurance to policy-holders, asserting that through digital technology, insurance could be sold to people where insurance companies themselves could not go.
He said the objective of the forum was, therefore, to expose Insuretechs to the operations and solutions which would be needed to boost the industry.
Explaining why FSD Africa was collaborating with NIC, the institution’s Principal in Charge of Innovation and resilience, Elias Omondi, said its objective is to deepen insurance penetration in Africa; and in this respect, Ghana is playing a leading role. Indeed, Ghana recently held a global conference on inclusive insurance and is proving to be a role model in the application of micro-insurance to increase penetration.
Evidencing the Government of Ghana’s commitment to this at the forum, the Head of Financial Market and the Innovation Unit at the Ministry of Finance, Benjamin Torsah-Klu, commended the NIC and its collaborators for organising the workshop, saying the ministry saw the event as cutting-edge as it aims to create a platform for the insurance industry to leverage on technology and innovation across the insurance ecosystem as a whole for the transformation of the market it serves.
“Government will continue to provide the enabling environment for digitalisation and innovation in order to reduce financial vulnerability, income inequality and the huge risk protection gap,” he assured. He further affirmed that the Finance Ministry saw the forum as a pragmatic step by the NIC to enhance insurance market development through technology and innovation.
