Could insurtech overtake traditional insurance?


Are we ready?

By Daniel Sarkodie DUAH

Just a little more than five years ago, technology started to focus on changing the insurance industry. Even though insurance is super important for the world to grow and expand, it was slower to use new technology compared to other industries. This means that while other industries were jumping on new ideas and tools, insurance was a bit behind.

The insurance sector, which is all about protecting people and things from risks, didn’t quickly catch up with the latest tech trends. This lag meant they weren’t using new technology as much as they could to improve their services and make things easier for customers. So, even though insurance is really important, it wasn’t taking full advantage of all the cool new tech stuff that was available.

What is insurtech?

InsurTech, a portmanteau of insurance and technology, is revolutionizing the insurance industry by leveraging innovative technologies to streamline processes, enhance customer experiences, and drive operational efficiencies.

One of the key drivers behind the growth of InsurTech is its ability to address longstanding challenges within the insurance industry. Traditional insurance processes often involve extensive paperwork, manual tasks, and lengthy turnaround times. InsurTech solutions, on the other hand, leverage technologies such as artificial intelligence (AI), automation, CRM systems and data analytics to expedite processes, reduce administrative burdens, and improve accuracy.

For insurers, brokers, and policyholders alike, InsurTech offers a myriad of benefits. InsurTech disrupts the conventional insurance model to meet evolving consumer demands and expectations. Policies can be issued faster through AI-driven underwriting processes, routine inquiries can be managed more efficiently with chatbots and workflow automation, and claims submission and processing can be streamlined through mobile apps and real-time data delivery.

Insurtech may not be growing in Ghana due to the following:

  1. Low insurance penetration: Overall, insurance isn’t a major part of the Ghanaian economy. Many people don’t have any insurance, and there is a mistrust of insurers or a lack of understanding about how insurance works.
  2. Infrastructure challenges: We face infrastructure limitations, such as poor internet connectivity or digital infrastructure gaps, which are essential for the effective functioning of Insurtech platforms.
  3. Regulatory hurdles: The regulatory environment in Ghana seem not to be quite conducive and sufficiently supportive of innovation in the insurance sector. Sometimes the complex regulations and bureaucratic processes are hindering the growth of Insurtech startups and initiatives.
  4. Low awareness and trust: There is actually lack of awareness among the population regarding the benefits and functionalities of Insurtech solutions. Additionally, trust in digital platforms for insurance services are low due to concerns about data security and privacy.
  5. Cultural and behavioural factors: Cultural preferences and traditional attitudes towards insurance play a vital role. People are used to a face-to-face interactions and traditional methods of purchasing insurance rather than adopting digital platforms.
  6. Market fragmentation: The insurance market in Ghana is highly fragmented, with many small players dominating the market. This fragmentation makes it challenging for Insurtech startups and initiatives to scale and gain significant market share.

What can we do better to improve it?

Increase awareness and education:

  • Financial literacy programmes: Partner with the government or NGOs to educate Ghanaians about the benefits of insurance and how insurtech can simplify the process.
  • Targeted marketing: Develop marketing campaigns that address Ghanaians’ specific concerns about insurance and how insurtech can solve them. This could involve using local languages and channels like radio or mobile money platforms.

Make insurance more accessible:

  • Micro-insurance products: Design insurance products tailored to low-income Ghanaians, with smaller premiums and coverage options.
  • Mobile money integration: Allow Ghanaians to easily pay insurance premiums and receive payouts through mobile money platforms they already use.

Improve regulation and infrastructure:

  • Supportive regulatory environment: The government can create a regulatory framework that encourages innovation in insurtech while protecting consumers. This includes initiatives like the National Insurance Commission’s InnoLab program.
  • Digital infrastructure investment: Continuous investment in Ghana’s mobile network and internet infrastructure will make it easier for people to access insurtech products and services.

The future is here (What the data says)

With technology becoming increasingly integrated in insurance, there is an anticipation that consumers would soon develop a fondness for their insurance providers. Venture capitalists begun to take note of the evolution, leading to substantial investments in Insurtech startups attracting about US$4.5 billion in investment in 2023 alone according to CB Insights.

Africa’s insurance market is the most underserved in the world even though the activity in the sector is on the increase, a trend that could signal a new phase of growth and advancement. Over 46 million adults are within reach of insurance, of which 12.5 million have insurance, indicating that there is opportunity for insurers to scale according to the research from a think-tank and non-profit enterprise Cenfri  – 2019 report.

Analyst also predict that the Insurtech industry will be worth US$119billion by 2027 making it one of the fastest growing and most fascinating industries on the planet.

The number of smartphone users in Sub-Saharan Africa is expected to reach 689 million by the year 2028, based on rate of growth in prior years. There were 415 million smartphone subscriptions in Sub-Saharan Africa in 2022.

Narrowing the statistics, the Digital Ghana – Report stipulated that in Ghana, a total of 43.88 million cellular mobile connections were active in early 2023 which is equivalent to 129.8 percent of the total population which was about 33.80 million. There were 23.05 million internet users in Ghana at the start of 2023, with internet penetration standing at 68.2 percent.

The report also confirmed Ghana to have 6.60 million social media users equating to 19.5 percent of the total population with Whatsapp standing at 82percent, Facebook 62.8percent, Instagram 52percent, Tiktok 39percent, Snapchat 52percent and Twitter 41.6percent. This information is necessary for Insurtechs to fine tune their strategies to meet the market. The digital landscape in Ghana is rapidly evolving with a significant increase in internet.

The country has over 80million mobile money users with total mobile money transactions hitting a total of GH¢1.9trillion in December 2023 according to the Bank of Ghana Economic Report. The stupendous increase in mobile phone usage indicates that Ghanaians are embracing the culture of online transactions with confidence and competence – good news for Insurtech initiatives and companies.


In conclusion, its of no reasonable doubt that Insurtech could finally be the gateway to accelerating insurance market penetration from the decade long 2percent figure if executed properly with the necessary expertise and data.

>>The writer is holder of Diploma in insurance from Ghana Insurance College, ALX and Google Certified Professional Data Analyst and a member of the Chartered Insurance Institute Ghana. He has half a decade experience within the Ghanaian insurance industry and is currently the Transformation & Partnerships Manager at iRisk Management Limited (Insurance Consultants). He can be reached via 0546109949 or 0200109758 and or [email protected]


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