Ghana’s insurance industry recorded nominal revenue and asset growth in 2024, but inflation averaging over 23 percent throughout the year nearly erased real value gains across most segments, according to the National Insurance Commission annual report released two weeks ago.
The National Insurance Commission (NIC) described the industry’s performance as “impressive” despite sharp economic headwinds, noting growth in both insurance revenue and underlying asset values. However, the regulator acknowledged that revenue and asset value growth rates struggled to keep pace with inflation when adjusted for purchasing power.
The life insurance sector recorded 22 percent growth in assets last year, but inflation eroded nearly all gains, leaving real asset value growth at just one percent. Life insurance sector investments continued dominating balance sheets, growing 23.4 percent from 7.06 billion cedis to 8.72 billion cedis.
Government securities accounted for 42 percent of life insurers’ collective portfolio, followed by property investments at 21 percent and bank fixed deposits at 20 percent. Investments in listed and unlisted equities accounted for 13.4 percent of cumulative total investment portfolios.
The non life sector fared worse, with 13 percent nominal asset growth turning into contraction in real, inflation adjusted terms. Like life insurers, non life insurers maintained the largest segment of assets in investment form, prioritizing liquidity and security due to short term nature of contracts with clients.
Government securities made up 32 percent of non life insurers’ total investments, the largest share. Equities, both listed and unlisted, comprised 22.8 percent, followed by bank deposits at 22.3 percent. Property investments accounted for only 16.7 percent due to relative illiquidity of such holdings.
The reinsurance sector recorded much stronger performance regarding asset growth, with robust 44 percent nominal increase double the pace of headline inflation, generating 16 percent growth in real terms. The NIC noted this led to considerable increase in real purchasing power of assets, suggesting the sector is thriving even in high inflation environments.
Insurance income accounts are now presented differently following adoption of International Financial Reporting Standards 17 (IFRS 17). Non life insurance revenue, formerly referred to as premium income, increased from 3.9 billion cedis to 5.0 billion cedis, representing 28 percent growth.
Life insurance revenue increased to 2.33 billion cedis, up 36 percent from 1.76 billion cedis in the previous year. Reinsurers enjoyed a surge in insurance revenue to 897 million cedis, up 37 percent from 655 million cedis earned in 2023.
However, these growth rates are considerably smaller in real, inflation adjusted terms at 3.32 percent, 10.43 percent and 10.58 percent for non life, life and reinsurance sectors respectively. The NIC stated this means there is need to shift paradigm by working to expand the current insurance market.
Non life insurers reported aggregate insurance service result, formerly referred to as underwriting profit, of 1.18 billion cedis in 2024, a huge increase over the 63 million cedis earned in the previous year. The NIC attributes this to positive performance of key portfolios, particularly motor insurance.
The life sector recorded positive insurance service result of 330 million cedis in 2024, reversing the 599 million cedis in losses from that core activity in 2023. This turnaround represents significant improvement in underwriting performance for life insurers following implementation of new financial reporting standards.
In 2024, non life insurers maintained diversified investment portfolios prioritizing liquidity and asset security. The sector’s investment strategy reflects the short term nature of insurance contracts they engage in with clients, requiring readily accessible funds to meet claims obligations.
The report highlights challenges facing the industry despite nominal growth figures. With inflation eroding real value gains, the NIC emphasized that insurers must work harder to expand market penetration and increase policy adoption across broader segments of the population.
Ghana’s insurance penetration rate, measuring insurance premiums as percentage of gross domestic product (GDP), remains among the lowest in Africa. The sector continues struggling with low public awareness, limited trust in insurance products, and competition from informal risk sharing arrangements.
The NIC operates under Insurance Act 2021, Act 1061, which replaced the previous Insurance Law of 1989. The commission’s mandate includes ensuring effective administration, supervision, regulation, monitoring and control of insurance business to protect policyholders and the industry.
Acting Commissioner of Insurance Michael Kofi Andoh has emphasized that promoting technology deployment and innovation represents a key pillar in the NIC’s current strategic plan to help spur sector growth. The commission launched an Insurance Sandbox environment in 2024, admitting five innovative solutions to foster development and testing of cutting edge insurance products and services.
The regulator supervises 26 non life insurance companies, 19 life insurance companies, and two reinsurance firms. Insurance Act 2021 prohibits composite insurance companies, requiring firms to separate life and non life operations into different companies.
The NIC launched a Complaints Management System in February 2024, providing a user friendly web based platform with SMS notification system accessible through the commission’s official website. The system aims to improve resolution of disputes between policyholders and insurance companies.
The insurance industry, led by the NIC, has actively engaged in blood donation campaigns over the past three years, donating 5,019 pints of blood to support the National Blood Service. In June 2024, the NIC received recognition as overall best in the corporate blood donor category.
The commission organized a judicial capacity building workshop for Court of Appeal and High Court judges in 2024, distributing copies of Insurance Act 2021 to aid adjudication of insurance related disputes. Representatives from United Nations Development Programme (UNDP), German Development (GIZ), Ghana Shippers’ Authority, Ghana Revenue Authority, and Police Motor Traffic and Transport Department (MTTD) participated.
The 2024 annual report emphasizes that despite impressive nominal growth figures, the insurance industry faces significant headwinds from macroeconomic conditions. The NIC stressed that sustainable sector development requires expanding market reach beyond current customer base while improving product design to meet diverse needs of Ghanaian consumers.
Regional offices of the NIC intensified enforcement of compulsory motor insurance and property fire insurance during 2024, conducting inspections at hotels, guesthouses, and along major highways. The commission partnered with police MTTD and Ghana Insurers Association for enforcement activities.
The report notes that government securities dominate both life and non life insurer portfolios, reflecting limited domestic investment alternatives and desire for stable, low risk assets. However, this concentration exposes insurers to sovereign risk and limits portfolio diversification opportunities.
Looking ahead, the NIC emphasized that industry growth must translate to real value increases rather than merely keeping pace with inflation. The commission called for innovations in product design, distribution channels, and customer engagement to drive meaningful expansion of insurance coverage across Ghana’s population.
