The National Insurance Commission (NIC), in partnership with MGA Consulting and the United Nations Development Programme’s Insurance and Risk Finance Facility (UNDP’s IRFF), is making strides towards fostering an inclusive insurance market in Ghana.
This initiative, marked by a pivotal workshop on Legal and Regulatory Review combined with Capacity Building, aims to address gaps and opportunities in inclusive insurance regulatory strategy. The objective is to shape the future of insurance in Ghana, making it accessible to underserved populations across the country.
Mr Michael Kofi Andoh, Commissioner of the NIC, emphasized that inclusive insurance represents the next evolutionary phase for the insurance market. He highlighted the necessity for frameworks urging collaboration among key stakeholders such as the National Health Insurance Authority and the National Insurance and Pension Regulatory Authority (NPRA).
Mr Andoh stressed that inclusive insurance would benefit all partners involved, highlighting its importance for the sector’s growth and sustainability. “This workshop marks a significant step towards enhancing Ghana’s insurance landscape, ensuring it becomes more inclusive and capable of addressing the diverse needs of its population,” he noted.
The workshop serves as a critical platform for discussing the emerging developments in inclusive insurance. The aim is to formulate regulatory strategies and roadmaps that enable the industry to reach out to underserved populations. By identifying existing gaps and opportunities, the NIC and its partners seek to create a more inclusive and resilient insurance market.
Transition from Traditional Insurance Markets
Mr Michael Abbiw of MGA Consulting underscored the need for a transition from traditional insurance markets, which have historically catered to a limited segment of the population, to a more inclusive model. He acknowledged that while inclusive insurance is not yet commercially viable, it is essential for the sector’s evolution.
Mr Abbiw emphasized the feasibility and necessity of implementing progressive inclusive insurance products in Ghana, particularly in response to emerging risks and opportunities.
Mr Abbiw highlighted agricultural insurance as a crucial component of achieving inclusive insurance under the new Insurance Act 1061. He proposed a model similar to the banking sector, where different kinds of licenses could encourage innovators to enter the inclusive insurance market. Just as commercial, universal, and rural banks target specific economic segments based on geographical location, inclusive insurance can be tailored to meet diverse needs.
The inclusive insurance market in Ghana remains largely untapped, with significant potential for expansion. Historically, the cocoa industry significantly contributed to the insurance sector’s economy, but this trend shifted with the advent of the oil and gas industry.
Despite this shift, insurance coverage has not adequately extended to certain economic sectors. Abbiw pointed out that specific banks target segments of the economy based on geographical location, a model that could be applied to inclusive insurance.
The NIC’s focus on inclusive insurance is a response to the pressing need to extend coverage to all sectors of the economy, especially those currently underserved. By collaborating with various stakeholders and leveraging new regulatory frameworks, the NIC aims to ensure that insurance services are accessible to a broader segment of the population. This initiative aligns with global trends where many countries have developed frameworks to make inclusive insurance a reality.
By fostering a more inclusive insurance market, the NIC aims to address the diverse needs of the population, ensuring sustainable growth and resilience in the sector. This initiative not only enhances the insurance landscape in Ghana but also sets a precedent for other countries aiming to achieve similar inclusivity in their insurance markets.
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