Micro Insurance market still unexploited

….only 12 companies provide service

Though Ghana’s micro-insurance industry is progressing, the sector which provides informal sector operators with financial security is operating below capacity as only 12 out of the over 40 insurance companies provide those insurance services.

According to an expert in micro-insurance business Russel Haresign, although Ghana has been tagged as the second most popular in micro insurance in Africa behind South Africa, more than half of Ghanaians do not have any insurance cover.

This, experts say, is because majority of people cannot afford traditional insurance where they need regular salaries or bank accounts for deductions.

A 2014 micro insurance landscape survey revealed that only 28 percent of the country’s population had micro insurance policies covering death, accidents and hospital.

Significantly, the total number of lives and properties covered for 2012 was 1.8 million, which jumped to 3.1 million in 2013 representing a general growth of 77 percent which increased by 140 percent to 7.5 million in 2014.

But in an interview with Goldstreet Business, Haresign, Country Director for BIMA, an international micro-insurance firm, said with the right policies in place, conventional insurance companies can excel in the sector.

“Everybody sees the potential but it’s the case of getting the business right. You can’t assume that what you have been doing for the past five years in the formal sector can be applied in the informal sector.”

According to him, a lot of the companies are uncertain about the prospects of their growth in the sector due to the huge misunderstanding and mistrust towards insurance in the informal sector.

Meanwhile the National Insurance Commission, NIC, has disclosed to Goldstreet Business that it will soon develop a database for people who are enrolled onto micro insurance.
This is to enable the commission to monitor the growth of the sector.

However, BIMA through telecommunication networks including Airteltigo enroll 60,000 people onto micro insurance companies every month.

BIMA is an international micro-insurance firm, which operates in 16 countries across the world. It commenced operations in Ghana in 2010.

The company pays up to GHS5, 000 to clients in terms of claims.

By Nana Oye Ankrah