Ghana’s insurance market has over the years been a crucial pillar in the country’s economic landscape, providing financial protection and stability to individuals and businesses. As the collective voice and representative body for insurance and reinsurance companies and other entities operating in the insurance sector, the Ghana Insurers Association (GIA) marks its 35th anniversary.
GIA, a prominent trade Association for all insurance and reinsurance companies licensed to transact in- surance business in Ghana, which was established in 1988 under the then Companies Act of 1963 (Act 179) (now the Companies Act, 2019 (Act 992)), has been a driving force in shaping Ghana’s insurance landscape, nurturing excellence through its illustrious 35 years’ journey. Founded to address the unique challenges faced by the insurance sector, it has over the past 35 years, evolved into a central hub for knowledge exchange, advocacy, and fostering ethical practices within the Insurance Industry.
The Association was inaugurated on October 7, 1988, by Alhaji Mahama Iddrisu, the then PNDC Member responsible for Finance and Economic Planning. It was conceived to serve as a unified platform for insurance companies, reinsurance companies, and associate members. The primary goal of the Association is to enhance professionalism, improve industry standards, and safeguard the interests of policyholders. “So by and large, for the past 35 years, the GIA has done a lot to achieve these particular objectives,” Dr. Kingsley Kwesi Kwabahson, the CEO of GIA emphasized.
Moreover, in the illustrious 35-year journey of the GIA, notable figures have played pivotal roles in shaping the organization into the formi- dable entity it is today. One such luminary is Nana Agyei Duku, the first President and Board Chairman of GIA, who assumed office in 1988. During his tenure, Nana Agyei Duku was credited with spearhead numerous improvements within the Association, laying the foundation for the success stories that followed.
That notwithstanding, the combined contributions of past Presidents and Board members also shaped the Association into a dynamic and thriving organization. As GIA continues to evolve, these leaders’ legacies remain integral to its ongoing success, marking each milestone in its remarkable journey.
Currently, Mr. Seth Aklasi takes the rein as the President and Board Chairman of GIA. Under his leadership, he has worked relentlessly to elevate GIA to new heights, solidifying its position as a force to reckon with in the insurance industry. His leadership has been characterized by strategic vision and a commitment to excellence, steering the association through challenges and fostering growth.
Impacts and Achievements in the Past 35 Years
For 35 years, GIA has been at the forefront of promoting insurance awareness in collabo- ration with stakeholders such as the National Insurance Com- mission (NIC), the regulator and supervisor of the Insurance Industry or the Ghana Insurance Market. Through concerted efforts, GIA has contributed to making insurance a household conversation, emphasizing its pivotal role as a key financial determinant for survival.
The Association has also been instrumental in ensuring effective advocacy, creating a favourable business environment, fostering innovation, addressing unhealthy competition in the insurance sector and protection of policyholders’ interest. Notably, GIA has advocated and championed for an era of self-regulation, aiming to proactively address the industry’s challenges with- out solely relying on external regulators and legal measures.
For example, GIA’s establishment of the Complaints Management and Advice Bureau (CMAB) in 2018 marked a significant step towards self-regulation. The Bureau functions as an important arm of a three-tier complaint management system, resolving issues at: the company’s level first, followed by GIA’s intervention, and finally, involving the regulator or legal channels, if necessary. However, with over 3000 cases adjudicated, CMAB boasts of a 95% resolution rate, dispelling the myth that insurance companies are reluctant to settle claims. “You will realize that the challenge of dealing with issues of claims payment, is mostly because clients are not well in- formed about the issues. And so, there’s a perception that is created that insurance companies are quick to pick the premium but slow to pay claims. We have tried to demystify the issue of claim payments.”
GIA works closely with the NIC in various forms, including the establishment of the right legal and regulatory framework. Furthermore, through ethical codes of conduct and practices, GIA ensures that its mem- bers uphold high standards, promoting integrity within the industry. Beyond this, the As- sociation had the Senchi Resolve, (adopted at the 2017 GIA Chief Executives Confer- ence) which was instituted in the spirit of self-regulation and later amended to the “Safari Valley Communique, issued in 2023, spelling out clearly what members have to do in ensur- ing ethical and best practices”.
Moreover, GIA’s influence ex- tends beyond its members, to collaborating with the Government and various institutions to address issues affecting insurers and the insuring public.
Above all, advocacy remains a core function, amplifying the Association’s voice on critical matters concerning the insurance sector and its im- pact on national development.
Addressing the Issue of Perception on Claims Settlement
In dealing with the perception that Insurance Companies fail or delay in honoring their promises, especially when it comes to claims payment, Dr. Kingsley Kwesi Kwabahson, acknowledged that it will require a concerted and sustained effort to address the wrong impression and hence, the formation of the Insurance Awareness Coordinators Group (IACG).
IACG comprises GIA, NIC, the National Association of Ghana Insurance Agents (NAGIA), the Insurance Brokers Association of Ghana (IBAG) and other relevant bodies as members, including organisations in the financial sector which are not even in the Insurance
Industry. The Group adopts a holistic approach to dispel myths surrounding claims settlement. Dr. Kwabahson further revealed that the primary task of the Group is to focus solely on raising aware- ness and educating the general public about insurance.
He, however, underscored that the wrong perception is root- ed in a lack of understanding among the public, regarding the intricate processes and requirements for claims settlement. The CEO further as- serted that many individuals may not be fully aware of the Industry’s commitment to pay- ing legitimate claims promptly.
“I must say that on a daily basis, we pay over 7.5 million Ghana Cedis as claims. So, it tells you that we pay quite a substan- tial amount as claims on yearly basis. And this is conservative because it’s not every claim that we publish because some are minor. So, you cannot say that an Industry that is paying 7.5 million Cedis every single day is an Industry that is not prepared to pay claims. Beyond that, you can also look at, for example, the June 3rd 2015 disaster, where we paid over 300 million Ghana Cedis claims which is significant. So, we are paying a lot and doing a lot. But it’s an issue of perception and naturally, we have to fight to correct that wrong perception through various avenues, including the IACG”
Highlighting the impact of these awareness initiatives, Dr. Kwabahson revealed that the perception index witnessed a remarkable 44% improvement in year 2023 alone. The impressive progress indicates a positive shift in public perception regarding the effectiveness of claims settlement within the insurance industry.
While celebrating the notable improvement in public perception on insurance, Dr. Kwabahson also recognised that there is still work to be done. As such, the GIA remains com- mitted to continuous aware- ness efforts, aimed at bridging the information gap and fostering a better understanding of the Industry’s dedication to fair and timely claims settlement. Afterall, the business of insurance is “claims payment”.
Motor Insurance, Not A Necessary Evil
Demystifying the myth that Motor Insurance is a necessary evil as compulsory insurance, Dr. Kingsley Kwesi Kwabahson, underscored the importance of the Motor Insurance policy. He revealed that the Motor Insurance policy falls under what is called the compulsory insurances and it’s made compulsory because “the law has the general public in mind, in terms of ensuring adequate compensation for all victims of road accidents”.
Dr Kwabahson thus stressed that drivers may argue that they don’t need the Motor In- surance policy, however, he noted that it is not about the driver, “it’s about the innocent third party on the street.” As such, the CEO challenged the common notion that insurance is unnecessary for those who believe they can self-insure and quizzed this perspective by requesting individuals to consider the consequences of reckless driving, hit and run incidents, and life-threatening situations? He further reiterated that compulsory insurances are not about the policyholder but are designed to protect the innocent third party, such as pedestrians, passengers, or individuals affected as a result of professional negligence leading to road accidents.
Dr. Kwabahson further revealed other types of compulsory insurances, including public liability, fire insurance on commercial buildings, and professional indemnity.
Indeed, all compulsory insurances are aimed at the innocent person… And so, in a nut- shell, I must say that all these insurances have been carefully chosen, in the wisdom of the Government to protect the in- nocent third party. Through the compulsory Motor Insurance, the Compensation Fund has been established to help ameliorate the effects of the accident on innocent victims, including covering hit and run drivers and even drivers who do not have insurance.
Furthermore, the CEO under- scored the duty of care individuals must have towards those who may be impacted by their actions or the conditions on their premises.
INSURANCE AWARENESS MONTH: Platform to Demystify Negative Perceptions About Insurance
Navigating the complex landscape of negative insurance perceptions, financial inclusion, and technological advancements, the GIA under the leadership of the GIA President and Board has been actively engaged in shaping the insurance narrative and expanding accessibility to a broader segment of the Ghanaian population.
Beyond IACG whose main duty is to demystify all negative perceptions about insurance, GIA introduced other similar important platforms to expand its awareness campaigns. One of such notable platforms is the Insurance Awareness Month.
The Insurance Awareness Month, championed by the GIA’s Public Relations and Ex- ternal Liaison Committee, “is doing a lot to actually project the Ghana Insurers Association specifically and insurance in general,” Mr. Ernest Frimpong,
the Chairman of the Committee disclosed. The objectives of the Committee, according to the Committee Chair, is to correct the negative perceptions of the general public on insurance; to improve and sustain public trust and confidence in insurance; to increase public knowledge on insurance products; and to increase public knowl- edge on insurance claims.
Laying emphasis on strategies GIA is undertaking to expand its visibility, Mr. Ernest Frimpong disclosed that, “You will see a lot of educational programs on insurance on various TV and radio platforms. Already, GIA through CMAB, is going round the country, doing public education on insurance and the claims process. This involves going to some lorry and radio stations within the communities or the regions that they visit to educate the public on Insurance, answer their questions and also receive their Com- plaints. So, GIA is actually doing a lot in that area. The Association also has a strong presence on social media with its own social media handles where it puts out a lot of information, including videos that the public need to know about insurance”.
Furthermore, the CEO of GIA revealed other initiatives including Papa Insurance series, which gives adequate information about the type of policy that one has to take given the situation and the need to avoid reckless driving.
We also have the widely circulating Under- writer Journal and the Under- writer Newsletter of Associa- tion. Beyond that, we have had and continue to have series of events, including appearance on radio and TV across the na- tion. And let me add that, as an industry, we have translated some insurance information into 36 Ghanaian languages. We have had the support of the German Development Co- operation (GIZ) and others, in having awareness creation across over 200 radio stations in the country, in addition to television and other programs. We have also visited the mar- kets and all these efforts are aimed at trying to make insurance the Ghanaian way of life.
Converting Insurance Access to Usage
Contrary to some reports, Dr. Kwabahson refuted the notion that almost 70% of Ghanaians lack access to insurance. He argued that data from the Min- istry of Finance’s Demand Side Survey, 2021 suggests that financial inclusion has increased from 58% (2018) to 96% (2022) indicating an improved access to financial services in general, with insurance playing a major role.
The survey posits that 68% of adults are now insured formally (as at 2021) com- pared to the previous 46% (in 2010). Also, according to the NIC Annual Reports, insurance coverage from the retail end has also improved from 30% (in 2020) to the current rate of 44%. He thus noted that the challenge now lies in con- verting this access into usage, especially within the informal working workforce, which constitutes a substantial portion of the Ghanaian economy.
Dr. Kwabahson therefore emphasized the importance of creating a need for individuals in the informal sector to drive adoption. “Fortunately, we now have inclusive insurance provisions in the Insurance Act, 2021 (Act 1061) and we also classify Agric insurance, at least for small holder buyers as part of the increasing inclu- sive insurance conversation.”
Recognizing the need to extend insurance coverage to the informal sector, the GIA has championed inclusive insurance. The Insurance Act now accommodates inclusive insurance, and collaborations with technical service providers such as Mobile Network Opera- tors (MNOs), which is aimed at leveraging mobile platforms for premium collections. Generally, Act 1061 has also extended the number of intermediaries and allowed for innovative in- surance. It is expected that all these improvements should lead to increased insurance coverage and penetration (measured as percentage of gross written premium to GDP).
Committee Chairperson, GIA’s Public Relations and External Liaison
GIA’s Role in Recapitalization and DDEP Matters
Buttressing the role of the GIA in the recapitalization agenda undertaken by the regulator (NIC) in 2021, Dr. Kwabahson revealed that the Association actively participat- ed in negotiations, ensuring a collaborative rather than confrontational approach.
The GIA CEO also noted the crucial role the Association played in the Domestic Debt Exchange Program, negotiat- ing regulatory forbearances that benefitted insurance players and Industry as a whole.
GIA Confident in AfCFTA Penetration
Mindful of ‘borderless’ Africa as a result of the AfCFTA imple- mentation, the GIA is gearing up for heightened competition with insurance bodies across Africa as the African Continental Free Trade Area (AfCFTA) brings new opportunities. Mr. Ernest Frimpong, GIA’s Public Relations Committee Chair, expressed confidence in the Association’s readiness for this new era.
Mr. Frimpong believes that GIA’s members strategic positioning Product Competitiveness and a cadre of highly qualified pro- fessionals make it poised for success in the broader African market. Emphasizing the solid reinsurance backing globally, he anticipates attracting both local and international clients.
The Association is proud of its efficient claims payment system, which, coupled with simplified processes, aims to enhance trust and encourage more individuals and businesses to insure with GIA members. Unfazed by the challenge, the GIA asserts that it has positioned itself well, adhering to regulatory standards and risk management practices, making it a formi- dable contender in the overall African insurance landscape.
Ernest Frimpong’s insights provide a comprehensive understanding of GIA’s historical role, ongoing advocacy efforts, and future visibility initiatives.
As the Association continues its mission to champion the interests of its members and improve public perception of insurance, these strategic measures aim to make it more accessible and trans- parent to the insuring public. Also, Dr. Kwabahson revealed that the Association is putting up a new state-of-the-art office complex that will be commissioned in the first half of the year 2024. This physical manifestation symbolizes the growth and attractiveness of the Insurance industry signalling a readiness to embrace and accommodate all stakeholders. As such, GIA aims to continue its efforts, further refining and solidifying its position as an Association dedicated to making insurance a way of life for Ghanaians.
Moreso, as the Association celebrates 35 years of resilience and progress, the vision for the future is clear continuous improvement, innovation, and a commitment to making insurance an integral part of the Ghanaian way of life. The leadership heralds a promising era for the insurance sector, where it not only safeguards but actively contributes to the development and prosperity of the nation.
Furthermore, under leader- ship of Mr. Seth Aklasi (Pres- ident of GIA) and the Board, GIA is not only dispelling myths about insurance but also actively engaging in initiatives that promote financial inclusion, embrace technology, and cater to the diverse needs of the Ghanaian population. The journey towards making insurance a vital part of everyday life in Ghana continues, driven by innovation, collaboration, and a commitment to the well-being of the entire society.
As the GIA celebrates 35 years of resilience and progress, its journey reflects a commitment to excellence, innovation, and ethical conduct. The GIA’s role in shaping the future of insurance in Ghana is evident through its proactive measures, collaborative efforts, and dedication to educating the public.
Looking ahead, the GIA continues to stand as a beacon for the Industry, driving positive change and ensuring a robust and consumer-friendly insurance landscape for years to come. Therefore, the GIA invites the public to join its 35 years’ anniversary as they deep dive into GIA’s historical milestones, innovative initiatives, and strategic vision for the future.
Ghana Insurers Association Beyond 35 Years
As GIA commemorates its 35th anniversary, the strides made in transforming the insurance industry into a dynamic, acces- sible, and vital component of Ghanaian life are noteworthy.
Making insurance more appeal- ing, going forward, Dr. Kingsley Kwesi Kwabahson, the CEO of GIA, highlighted the need for collaboration across various bodies within the Insurance Industry to make it attractive, profitable, and beneficial to both members and policyholders.
Moreover, GIA, as a key player, is undertaking series of initiatives: “Capacity building is one, awareness creation is an- other, and the various interventions that we’ve had including the Complaints Management and Advice Bureau which is not only focused on complaints but also providing advice on various options that are avail- able to the insuring public. Section 110 of the Insurance Act, 2021 (Act 1061) has rede- fined a number of things. We have provisions on sand boxes and technical service providers, all aimed at ensuring that we have a better environment to operate as an Insurance Industry. So, from the legal and regulatory, awareness creation and capacity building perspectives, we’ve been working to ensure that insurance becomes the Ghanaian way of life”.
CEO’s Message to Members
Dr. Kwabahson, in his remarks to members, revealed the relevance of insurance and assented that “our forebears were right in making insurance one of the pillars of the financial industry”. He therefore charged members to work as hard as possible to maintain the legacy and move away from the negatives. He, however, admonished that “unbridled competition will not help us achieve our objectives. We must compete fairly and we must charge right and we must do proper underwriting that will ensure that insurance continues to thrive as one of the preferred areas of insuring goods” and as a catalyst for the development of the country.