The insurance industry has always been a cornerstone of economic stability and growth, yet its role in agriculture—a sector that remains the backbone of many developing economies, including Ghana—often goes underappreciated.
President Nana Addo Dankwa Akufo-Addo has urged the insurance industry to develop and promote suitable and affordable agricultural policies to support both commercial and smallholder farming. Highlighting the sector’s progress and the need for greater inclusivity, the President emphasized the pivotal role of insurance in fostering sustainable agricultural development and economic growth.
“Since the majority of citizens work in the informal sector, the insurance industry must champion products that enable access to appropriate and affordable insurance to the financially excluded, under-served, informal sector operators, especially micro and small business enterprises.”
Nana Addo Dankwa Akufo-Addo, President of the Republic of Ghana
Since assuming office in 2017, President Akufo-Addo has overseen significant strides in the insurance sector, which are crucial for economic stability and growth. Among these steps is the passage of the Insurance Act of 2021, aimed at enhancing regulatory supervision and fostering innovation within the industry. This legislative framework has been fundamental in reshaping the landscape of Ghana’s insurance market.
The President also said that new minimum capital requirements have been established, which have substantially bolstered the industry’s financial foundation. This he indicated has led to an impressive increase in the industry’s gross written premium, soaring from GH¢2.4 billion in 2017 to GH¢8.1 billion in 2023. Concurrently, the total assets of the sector have grown from GH¢5.4 billion to GH¢15.1 billion over the same period.
Despite these commendable advancements, the President acknowledged that insurance penetration remains a significant challenge, standing at a mere one percent. This is in contrast to the coverage increase from 29 percent in 2016 to 44 percent in 2022. The low penetration rate underscores a critical gap in the reach and accessibility of insurance services, particularly in rural and underserved areas.
President Akufo-Addo’s call to action is clear: the insurance industry must intensify efforts to reach the financially excluded and underserved populations, especially those in the informal sector, which constitutes the majority of the Ghanaian workforce. This includes micro and small business enterprises, which are often the most vulnerable to economic shocks and natural disasters.
Future Opportunities and Challenges
Looking ahead, President Akufo-Addo expressed optimism about the future of Ghana’s economy and the insurance sector’s role in its growth. He emphasized that the economy is poised for significant growth, which will drive increased demand for innovative and inclusive insurance solutions.
“I urge Enterprise Insurance to continue with its pioneering spirit, embrace new technologies, develop solutions that meet the evolving needs of our communities, and remain a leader in the industry.”
Nana Addo Dankwa Akufo-Addo, President of the Republic of Ghana
Climate change poses a significant risk to agriculture, and insurance can play a vital role in mitigating these risks. President Akufo-Addo further called on Enterprise Insurance and its partners to design products that protect people from losses and damages caused by climate-related events. By doing so, the insurance sector can provide a safety net that enables farmers to recover and thrive despite adverse conditions.
The future presents both opportunities and challenges for the insurance industry. On one hand, economic growth offers the potential for expanding insurance coverage and penetration. On the other hand, the industry must navigate an increasingly complex risk landscape, characterized by climate change, technological advancements, and shifting consumer expectations.
President Nana Addo Dankwa Akufo-Addo’s call for the insurance industry to promote suitable and affordable agricultural policies is a timely and necessary appeal.
As Ghana seeks to strengthen its agricultural sector and ensure sustainable economic growth, inclusive and innovative insurance solutions will be crucial. The progress made in the insurance sector since 2017 provides a strong foundation, but much work remains to be done to achieve widespread insurance penetration and coverage.
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