Growth in Motor Insurance Sector Soars by 26% during 2021
Ghana's Motor Insurance Sector Experiences 26% Growth in 2021, Boasting a Value of GH₵2.3 Billion
The Motor Insurance industry exhibited a 26% growth rate in 2021, marking an 11% decline from the previous year. Notably, the sector's value of business undertaken hit GH₵2.3 billion for the year under review.
The industry's growth trajectory saw an increase from 9% in 2019 to 37% in 2020, while the value of business in 2017 stood at GH₵566 million.
Vice President Dr. Mahamudu Bawumia, attributing the growth to the implementation of the motor insurance database, emphasized that digitization has significantly reduced corruption in the insurance sector and eliminated the possibility of fake insurance certificates.
In pursuit of digitalization, the National Insurance Commission (NIC) implemented the Motor Insurance Database to address the issue of vehicles with fake motor insurance stickers on the roads, thereby ensuring road safety and security.
All insurance policies, now embedded with key security features, have been synchronized to a national database. This database can be easily accessed through any mobile phone by the insured, police, and the public. Dr. Bawumia encouraged the public to verify the authenticity of their insurance policies by dialling a USSD code.
Dr. Bawumia, speaking at the Annual General Meeting and Education Conference of the West African Insurance Companies Association (WAICA) in Accra, expressed optimism about Ghana's economic recovery from the COVID-19 pandemic. He noted that the insurance industry plays a crucial role in driving the country's growth spurt.
A strong correlation between a country's economic development and the development of its insurance sector has been identified. Dr. Bawumia recognized the significant benefits and contributions of insurance to the economy, prompting government efforts to further strengthen the insurance industry.
Among these initiatives are the recent passage of the Insurance Act 2021 (Act 1061), which provides a robust regulatory framework to protect consumers and increase accessibility to insurance for low-income brackets. Moreover, the government is working on recapitalizing the insurance industry, aiming to strengthen the financial health of regulated insurance entities.
The insurance sector is also expected to participate actively in the development of Ghana's capital market by improving its current investment mix.
The WAICA meeting, themed 'The New Normal; Fact or Fiction - How Realistic is the Practice and Spread of Insurance in West Africa?', also highlighted the crucial role of ongoing market recapitalization within the industry.
Dr. Justice Yaw Ofori, Commissioner of Insurance of the National Insurance Commission (NIC), noted the importance of this ongoing recapitalization project, believing it will create a solid foundation for growth and profitability within the industry. He further emphasized the need for insurance regulators to set requirements and guidelines to capitalize on regional opportunities.
The evolving landscape of insurance in Africa necessitates that insurers adapt their business and operating models to remain competitive. Additionally, digitalization can facilitate the elimination of fake insurance certificates, increase transparency, and streamline claims processes, ultimately leading to a more secure, transparent, and efficient insurance industry.
- Dr. Mahamudu Bawumia, the Vice President, believes that the insurance industry plays a significant role in driving Ghana's economic growth spurt.
- A strong connection has been identified between a country's economic development and the development of its insurance sector.
- Dr. Bawumia recognizes the contributions of insurance to the economy, prompting government efforts to further strengthen the insurance industry.
- Among these government initiatives are the recent implementation of the Insurance Act 2021 (Act 1061) and the ongoing recapitalization project aimed at strengthening the financial health of regulated insurance entities.
- The insurance sector is expected to participate actively in the development of Ghana's capital market by improving its current investment mix.
- Digitalization in the insurance sector, as shown in Ghana's Motor Insurance Sector, can eliminate fake insurance certificates, increase transparency, and streamline claims processes, ultimately leading to a more secure, transparent, and efficient industry.
