Ghana: Insurance penetration remains low compared to other African countries, says report
In June 2015, insurance companies owned just five per cent of all assets in the financial sector.In Ghana, insurance penetration remains low compared to other African states, according to official figures seen by Business Day.
The penetration rate stands below two per cent while South Africa
and Namibia have rates of 14.5 per cent and 7.5 per cent respectively, the African Insurance Organisation report shows.
In June 2015, commercial banks in Ghana owned 75 per cent of all assets in the financial sector, while insurance companies owned just five per cent.
Head of Bancassurance at Stanbic Bank Henry Manyo-Plange told the newspaper that despite the figures, the sector has a bright outlook as insurance companies partner with banks to provide insurance products, a practice known as bancassurance.
However, he believes that some challenges remain, such as a lack of education about insurance and financial services and the fact that a high percentage of the population (over 70 per cent) doesn't have access to formal banking services.
He added that regulators should also look at expanding the scope for banks to use technology to enrol customers into bancassurance services.
According to a December 2014 study from consulting firm Bain & Company, banks and insurance companies can expect a 15 to 20 per cent revenue growth in sub-Saharan Africa.
It said that countries like South Africa, Nigeria, Angola, Kenya and Ghana are fast becoming a new "El Dorado", thanks to a high economic growth rate and a wide margin of progression due to the low access to banking services.
Populations in the region are set to benefit from an additional purchasing power that could reach $495 billion by 2020, which should develop the use of insurance, according to the study.