By Daniel Duah SARKODIE
At her small shop in Makola Market, Aunty Akua sits behind the counter, flipping through a pile of receipts and insurance documents; and the worry in her eyes says it all.
Weeks and months have passed since her consignment of fabrics was stolen but her attempt to claim from insurance seems to be going nowhere with the endless paperwork, confusing records and finger-pointing on who is to be blamed to the loss. Her story is not unique.
For many Ghanaians, the word ‘insurance’ evokes images of long queues, unclear terms and delayed claims. But a quiet revolution is brewing; one that could radically improve trust, efficiency, and transparency in the insurance sector and that revolution is powered by blockchain technology.
What is blockchain?
At its core, blockchain is a digital ledger that records transactions in a secure, transparent and unchangeable way. Think of it as a shared book that every party involved can see but no one can alter without agreement.
The technology gained fame through cryptocurrencies like Bitcoin but its real power lies in transforming industries that rely on trust, verification and recordkeeping just like insurance.
Why blockchain matters for insurance in Ghana
Insurance in Ghana, much like in many African countries, faces three critical challenges: low penetration (hovering below 2percent), trust deficit and slow claims processing of which blockchain can help solve all three.
- Improving trust with smart contracts
Smart contracts are self-executing contracts coded on a blockchain. Once specific conditions are met; like proof of an accident from a police report, the contract triggers automatically releasing the insurance payout. In Kenya, for example, the microinsurance firm BimaLab partnered with blockchain developers to pilot automated claims for farmers affected by drought. Using satellite data and smart contracts, the system paid claims without a single form being filled. Imagine what this could do for Ghana’s cocoa farmers or Ghanaian drivers battling delays after accidents.
- Fighting fraud through transparency
Fraudulent claims cost insurers millions each year leading to higher premiums for honest customers. Blockchain provides an immutable history of policies, claims and transactions that essentially means no tampering, no double claims or fake accidents. In India, insurer ICICI Lombard implemented a blockchain-based solution to process motor insurance claims which linked workshops, insurers and clients on a single blockchain, reducing fraud and speeding up settlements. Ghanaian insurers, especially for motor, health and agricultural lines, could see massive benefits from such systems if installed correctly.
- Simplifying reinsurance and cross-border settlements
Reinsurance is like insurance for insurers. Ghanaian insurers often cede portions of large policies to reinsurers abroad but reconciling records and claims across countries can sometimes take months. Allianz and Swiss Re piloted blockchain platforms for reinsurance contracts that cut settlement times from weeks to hours. With Ghana becoming a hub for international projects and oil exploration, a blockchain-driven reinsurance model would help local firms stay competitive.
Real use cases Ghana can adopt
- Parametric insurance for farmers: Using weather data and satellite imagery, policies pay automatically when drought or flood thresholds are triggered which is already happening in Zambia with support from the World Bank. Cocoa, maize and rice farmers in regions like Brong Ahafo and Northern Ghana suffer from climate volatility and this technology would be a very useful tool manage the risk.
- Blockchain-based insurance ID linked to Ghana Card: In this use case, each insured individual is issued a tamper-proof digital insurance identity powered by blockchain technology. This ID stores all the person’s policy details and claims history in one place making it easy to verify and nearly impossible to fake. No more back and forth or lost paperwork; just smooth, trusted access to insurance services. This approach fits perfectly with Ghana’s push to digitize insurance, especially as the NIC encourages using the Ghana Card and Mobile Money to reach more people. It’s not just theory-countries in Latin America are already using this model through Aeternity Blockchain to provide microinsurance using decentralized digital identities.
- Fraud prevention in health insurance: A blockchain ledger connecting hospitals, the National Health Insurance Scheme (NHIS), private insurers and pharmacies can significantly reduce fraud and inefficiencies in Ghana’s healthcare system. With each medical service or drug time-stamped and securely recorded, the risk of duplicated claims and phantom billing is virtually eliminated. This level of transparency and accountability is especially beneficial for NHIS, private health insurers and micro-health schemes which often face difficulties verifying claims and preventing misuse. By adopting this system, Ghana can take a major step toward modernizing its healthcare infrastructure like Estonia’s National health system where blockchain is used to secure patient data and insurance claims.
Challenges to consider
While the promise is exciting, blockchain isn’t a magic wand; infrastructure, regulatory clarity and public education remain hurdles. Ghana’s National Insurance Commission (NIC) will need to play a leading role in setting standards for adoption and a new insurance curriculum update to prepare tomorrow’s underwriters for this new paradigm.
Final thoughts – Building a more trustworthy future
In a country where a simple car accident can spiral into a paperwork nightmare, blockchain technology offers something radical – trust without bureaucracy. It won’t happen overnight, but the seeds are there for startups, insurers and regulators to come together and plant them.
Back in Makola, Aunty Akua may not care about ‘blockchain’ as a buzzword but she would care deeply about a world where her claim is paid the same day without chasing anyone. That’s the promise and power of blockchain for Ghanaian insurance.
>>The writer is holder of Diploma in insurance from Ghana Insurance College, ALX & Google Certified Professional Data Analyst and a member of the Chartered Insurance Institute Ghana. He has almost a decade experience within the Ghanaian corporate industry with the greater part in insurance. Daniel is currently the Transformation & Partnerships Manager at iRisk Management Limited (Insurance Consultants) and aspiring PMP. He can be reached via 0546109949 or 0200109758 and or [email protected]
Sources:
- World Bank Group. (2022). Parametric Insurance: Scaling Up Climate Resilience.
- BimaLab Africa. (2021). Insurtech and Blockchain Pilot Projects.
- McKinsey & Company. (2021). Blockchain in Insurance: From Hype to Reality.
- Swiss Re Institute. (2020). Reinsurance on Blockchain: Improving Efficiency and Transparency.
- Ghana Insurers Association. (2023). Annual Report.
- ICICI Lombard General Insurance. (2022). Blockchain for Motor Claims Management.
