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Towards Life Insurance Market Development; Policyholder Data, Social Impact Assessment, Keys to Inclusive Insurance



The insurance industry plays a critical role in managing risks for individuals and corporates alike in a world of uncertainties. It is by no accident that almost every country in the world has some type of insurance mandated by law in order to provide the needed relief to affected persons/entities when insured risk events occur.When adequately promoted and regulated, the insurance industry also contributes quite meaningfully to overall gross domestic product (GDP) of a country, with insurance premiums contributing as high as 5-10% of GDP in some of the developed economies (Global Insurance Market Trends Report, 2016).

Like many sectors of the economy, the insurance industry in Ghana, and much of Africa, is yet to achieve its full potential. This is particularly so in the case of life insurance which is usually not mandatory. This article speaks to one particular reason for the underdevelopment of life insurance in Ghana; the paucity of adequate data on the uptake of life insurance policies.This paper proceeds to propose some novel interventions that must be embraced by the industry towards enhancing its performance.


Ghana Insurance Regulation and Regulatory Reporting

Act 724 (2006) of the Parliament of Ghana established the National Insurance Commission (NIC) as the regulator for the conduct of all insurance, reinsurance and insurance intermediary businesses in Ghana, except for health insurance which is regulated by the National Health Insurance Authority. Section 2, Clause 1, of the act captures the objectives and functions of the NICas:


“to ensure effective administration, supervision, regulation, monitoring, and control of the business of insurance to protect insurance policyholders and the insurance industry other than health insurance under the National Health Insurance Act, 2003(Act 650)”.


Clause 2 of this Section of the Act proceeds to direct the various functions that the Commission must perform towards the attainment of its objective as set out in Clause 1 above. The Insurance Act also empowers the Commission to issue specific regulatory guidelines and circulars as and when necessary that may become binding on all stakeholders in the insurance business in Ghana. Further to the performance of all its functions, Section 20 of the Insurance Act 724 (2006) requires the Commission to publish annual reports of its activities, encompassing the activities and operations of all of its regulated entities, covering the preceding year.


In putting out its annual publications, the NIC relies on data and information which it collects and collates from its regulated entities via a monthly reporting template. The latest of this publication is the NIC’s “2017 Annual Report and Financial Statements” as was published earlier this year. Over the years, the NIC’s annual report publications have been heavily skewed towards data and information on the non-life sub-sector of the industry to the disadvantage of the Life sub-sector. This is obviously the case because of the historical evolution of the Ghanaian insurance landscape where Life insurance underwriting was only a department of the then composite insurance companies until the coming into force of the insurance act in 2006. And ever since, even with the advent of rapidly growing investments in well capitalized life insurance companies in the market, life insurance premiums remain subservient to non-life insurance premiums in Ghana.


This situation puts Ghana’s insurance industry at odds with most countries around the world where insurance penetration, insurance density and insurance policyholder count is driven largely by the contribution of Life insurance companies rather than non-life companies. This is evident in various international reporting on insurance around the world; an example being the Swiss Re Sigma No. 3/2016 report which publishes segregated data on life and non-life insurance penetration (measured in percentage terms) and insurance density (measured in currency terms) from selected countries around the world.


Shortfall of the Annual Insurance Industry Report

The 2017 NIC report, the latest publication of its series, happens to be the most comprehensive to date especially as it attempts to capture as much reportage on thelife insurance sub-sector as it does the non-life sub-sector. The report captures and reports various parameters of the overall life insurance sub-sector and also reflects the individual performances and/or contribution of all the 22 registered life insurance companies at the time. Captured below are some of the important parameters and key financial ratios that the 2017 report captures;


Gross premiums
Percentage growth in premiums – year on year
Profit after Tax
Change in Policyholder inflows
Policyholder Coverage
Proportion of Investment to Assets
Policyholder Benefit Cover
Premium Retention ratio
Investment Yield
Return on Equity
Return on Assets
Expense Ratio
Change in Capital and Surplus
Aggregated Life Industry Income Statement
Aggregated Life Industry Balance Sheet


Obviously, all these parameters and financial ratios of the various Life insurance companies as reported are skewed towards revealing the market conduct and financial prudence of these various companies. This level of details in the publication provides for industry transparency and reveals critical information on the financial strength and viability of the various insurance companies and how well they are managed. With this much of information and transparency in the publications, policyholders and prospective policyholders are clothed with adequate data for their personal analysis of the strength and viability of the various insurance companies. Indeed, the regulator is also able to glean the adequacy and the level of leadership, professionalism and governance that is practised by the principal officers and management of the various companies so early interventions may be recommended in the event of breaches.


However, the report falls short of capturing and reporting other types of data which may be very fundamental to government policy decision making. Whereas the regulator in its gatekeeping role will focus on these ratios and parameters to continuously monitor the financial health and sanity of the industry, it does so at the expense of measuring and reporting the social, economic, demographic and geographic characteristics of the insured population. These characteristics are much more tangible and easier for people to relate to so to influence the uptake of life insurance policies.


The government of Ghana, in making its policy decisions, must be well equipped with the makeup – geography, economic status, educational status, employment status, and many other social characteristics – of the current insured population so to be able to arrive at a holistic, comprehensive report that can inform unblemished policy decision making to curb the low insurance penetration that the country continues to record. Indeed, such level of detailed information on the current insured population will also help the insurance underwriters to identify the preferences of the population and also identify the gaps in the adequacy of insurance solutions that they introduce into the market.


Insurance Penetration, Insurance-Inclusion and the Social Impact Measure


It is a considered view that African countries and other less insurance-inclusive countries must make strategic changes to how their advocacy and policy decision towards insurance inclusion is pursued. Insurance regulators from these countries must adopt an entire paradigm shift towards measuring and advocating Insurance Density and Policyholder Count rather than the continual focus on Insurance Penetration.


Insurance penetration is measured as total insurance premiums expressed as a percentage of GDP of the economy. Insurance density is measured as the ratio of total insurance premiums to the total population – insurance premium spend per capita. Policyholder Count is the total number of separate in-force (active) insurance policies – including both individual policies and group scheme policies – in the market. Total Lives Assured is the total number of identifiable persons that have come under insurance protection, and stand to benefit from insurance claims, as a result of being nominated as lives assured under insurance policies.


Unfortunately, the insurance penetration parameter as a measure of insurance inclusion makes for very deceptive analysis as it measures the total amount of insurance premiums in the market rather than the number of people who are reached by insurance and actually have in-force insurance policies at a point in time. Another challenge with the insurance penetration parameter is the fact that it is not an independent yardstick as its unit of measurement is a function of the performance of the other sectors of the economy and their contribution to GDP. Such that, should insurance premiums grow very significantly in a particular year, the insurance penetration measure will only record a corresponding significant jump if all other sectors of the economy remain at a constant growth. Any rise in the output of the other sectors of the economy will erode the insurance penetration measure as it is recorded as a percentage of GDP. The other drawback of this measure remains that its score can be influenced positively by a single business with high premiums which may not be representative of the average premiums in the market or the actual spread and reach of insurance coverage across the country.


It is for above reasons that insurance regulators must shift focus away from measuring the total insurance premium income to rather projecting the total number of individual life policies purchased (policyholder count) and the corresponding total number of lives insured amongst the population. The other insurance reporting focus area that must be projected for policy decision making is the insurance density parameter as it reflects the actual average household expenditure on insurance even as population increase remains rampant in Ghana and across many of the insurance-excluded markets. For instance, an increase in the number of insurance policyholder counts or number of lives assured is a true reflection of the quantum and reach of insurance inclusion. Also, any increase in insurance density scores will most accurately reflect an increase in the actual uptake in insurance either by new entrants or the existing insured increasing their spend on insurance.


However, while these parameters are projected, their reportage and analysis cannot be done in isolation either. These parameters must be analysed in conjunction with the actual demographic data of the particular insured population so to have complex, big data, which can be analysed in diverse ways to churn out key strategic trends in the insurance market. Ultimately, however, all these analysis and reports must be disaggregated and analysed in conjunction with various other social and economic data from other sources; be they primary or secondary. This approach will bring about a Ghana with readily available, user friendly, industry coherent and widely disseminated data for strategic analysis leading to government and social policy decision-making for rapid sustainable economic development.


The table below captures some proposed parameters that must be collected, collated, analysed and reported on in addition to the financial/prudential ratios that are put out in the regulator’s annual report.


Data ParameterWhat is Measured
Total Policyholder countReveals the accurate number of Ghanaians with at least one in-force Life insurance policy.
Total Lives assuredIndicates the number of Ghanaians who are protected against various insurable risks
Total premium revenueReflects the amount of money Ghanaians have spent to indemnify themselves against their insured risks.
Total benefits assuredReflects the amount of money that is due policyholders in the event of risk event occurrences. It reflects the total underwritten liability of life insurance underwriters
Insurance DensityMeasures the average insurance spend amongst the population. When analysed together with other available economic data, it will reveal the quantum of insurance spend against other priorities of households
Regional breakdown of policyholdersReveals which of the 10 regions lag the most in insurance inclusion and which regions prefer which kinds of policies.
Policyholder genderReveals the gender affinity towards life insurance and risk protection in Ghana. This parameter, when analysed against other parameters and other social and economic data, will throw up relevant information on gender development issues.
Policyholder ageReveals the age bracket and which generation of Ghanaians are more risk-protection conscious. This is another key parameter that must be analysed against other parameters and other social and economic data.
Policyholder occupationThis parameter will reveal the social classes of Ghanaians who are most insurance-included. It will reveal the level of informal sector uptake as against various sectors of the formal/corporate employees.
Policyholder Income levelThis parameter will reveal the relationship between income levels and insurance inclusiveness. Do those who earn more spend more to protect their wealth as against lower wage earners? Are insurance premiums too high for lower wage earners to afford?
Policyholder level of educationSupports or disproves the hypothesis that those with higher levels of formal education understand the need for insurance and savings the most in Ghana
Class of Life business (business line classifications)This parameter will reclassify the classes of life insurance policies into less technical and simpler ways for reporting and policy decision purposes. For instance; pure risks policies as against savings & risk policies. Bundled policies (resultant policies arising out of the need for other transactions; credit life and mortgage life policies) as against personally motivated policies (policies purchased for personal wealth and family risks protection). This will also cure the issue of overlapping classes (products) that are underwritten and reported by both life and non-life insurance companies.
Type of policy (Individual policy vrs. Group schemes)Identify the number of individual life policies as against number of Group Life schemes in the market.
Group scheme premiums versus Individual life premiumsIdentify the contribution of individual contract policies as against the aggregated premiums arising from group schemes. This will give an indication of the level of employer sponsored life insurance schemes in the market as Employee Benefit Group Life schemes are significant accelerators of total Gross Written Premiums scoresbecause of the high premiums they command.
Number of lives covered under Group schemeThis will be a key parameter to be identified as a unique set of insured population. This will make a good parameter to be factored into the “Total Lives Assured” parameter.
Employee Benefit Group Life Scheme per industryThis is targeted at identifying those employers who value the lives of their employees (and their families) by providing adequate income replacement insurance policies for their workforce. It can further reveal the multiples of cover they provide and the scope of benefits the employer schemes provide. The industry specific breakdown of this parameter must be known for strategic target of the industries that lag on this score.
Total number of claims paid vrs total number of claims repudiatedThis will reveal the level of fraud or attempted fraud by policyholders in the market. It will also influence the level of confidence in insurance as it is widely reported that insurance companies do not pay benefits when claims are put forward. Other policyholders may also become encouraged/emboldened to put forward claimable events which may befall them as some policyholders are intimated to approach their insurers to make claims.
Distribution channelThis will reveal the most preferred medium by which policyholders buy insurance. Apart from identifying the penetration of the traditional channels, including insurance agents and brokers, this parameter will reveal and measure other channels’ contributions; bancassurance, mobile insurance (telco-assurance), micro-insurance, retail shopping centres, fintech aggregators, loyalty reward schemes, etc.
Total commissions and fees paid to intermediariesThis is an expense measure for insurers that must corroborate the revenue measure of brokers in the market. Any significant difference in this expense line as reported by insurers as against what is reported by Brokers as revenue will expose any underreporting or overreporting by either party.
Co-insuranceAs a rapidly growing phenomenon especially in the Group/Corporate business underwriting space, this parameter will reveal the quantum of Group Schemes that are underwritten by two or more insurance companies under one policy (shared risk, shared premium and shared claims payment). This parameter will throw out a reconciled position of the shared business in the market as these premiums could easily lead to multiple reporting of same premiums from the various co-insurers who are partaking on the scheme.


Partnerships towards Sustainable Development

This article is not oblivious of the paradigm shift that will be required to implement such vast additions to the regulator’s reporting going forward.It may be argued that the regulator could easily take on the additional responsibility of reporting on these indicators in its annual reports, but there is a considered viewthat this approach will be beset with serious challenges and will most likely prove futile. It is noted that the insurance regulator in Ghana has under its ambit a large number of regulated entities(27 non-life companies, 22 life companies, 79 brokerage firms, 5 reinsurance companies, 2 reinsurance brokers, and 3 loss adjusting companies) to grapple with even as it attends to its other day-to-day functions of maintaining the sanity and health of the sector. Apart from these downsides, the bigger challenge may be that the regulated entities,the primary source for aggregating such data, may themselves not have adequate level of data intelligence in their organisations so to be able to submit same to the regulator for collation and reporting.Such challenges actually present an opportunity for the entire industryto avail itself for capacity building in Management Information Systems (MIS) and data analytics so the various entities can mature in making data-driven management decisions.

The United Nations’ Sustainable Development Goals (SDG), goal 17 – “strengthen the means of implementation and revitalize the global partnership for sustainable development” – encourages various facets of knowledge and skill-sets from different institutions and organisations coming together with impactful contributions towards the attainment of the shared development goals by 2030. As such, just as the NIC collaborates with the German Development Agency (GIZ) on many projects, for instance, the regulator could commission development partners to support it in undertaking an initiative of this nature to a successful end. The preponderance of evolving nimble and agile fintech and insurtech companies, together with ardent emerging financial inclusion think tanks, can be put to some good partnerships in this regard.


Benefits to Stakeholders

The above parameters and the many others that could be considered for analysis will return positive impacts on the social and financial front to various stakeholders. Some of these anticipated impacts include;

  • Government Policy Impact: for the first time, the government of Ghana will have data on the particular social and financial status of all those insured, where they are, what they do, etc. This will provide relevant information towards targeted insurance education and campaign within the broader scheme of the financial education campaign being championed by the government. The campaign will be better targeted in terms of the geography and economy of the places that lag behind in uptake, the language of facilitating the campaign, the level of detail and granularity required in packaging the training material, etc.


  • Regulatory impact: these parameters will lead to stronger, data-driven supervision and regulatory oversight over the entire industry. The analysis of these parameters together with data from the other regulated insurance entities will help identify lapses in the monthly reports as submitted by all the regulated entities. The regulator will be able to have a rather widespread view of its regulated entities to inform more accurate problem-solving regulatory interventions.


  • Insurance Industry Impact: reporting on these parameters will produce one-stop-shop information on the entire industry to inform deliberate strategy formulation and implementation by the various insurance companies and the intermediaries alike. Such reporting will inform the Boards of the various insurance market players to direct their investments appropriately to where the identifiable gaps will be identified so to maximise returns for their shareholders. The management and leadership of the various insurance companies will be compelled to build data intelligence so to be able to submit such data to the regulator as will be required. The insurers will now be able to have adequate data to inform appropriately targeted product development and risk-appropriate pricing to attract patronage. The publication of such broad-based holistic data from the regulator will lead to healthier competition in the market; less price wars and unprofessional conduct by practitioners as detailed information on the market will be readily available to all the industry players. Reinsurance companies will have a broader understanding of the various risks underwritten in the market and will react much more appropriately to innovations that insurers will put forward in the market.


  • International Agencies and Development Partners: this group of very important stakeholders in the affairs of developing nations like Ghana will have readily available data on what the exact gaps in the uptake of insurance in Ghana are so they may support government’s course more appropriately in that regard. It will inform and direct where donor support should be channelled to for maximum impact on insurance uptake. With trusted, accurate, timely and readily available data on the life insurance market, donor agencies and development partners will be more comfortable to invest in direct-impact institutions and programs that support insurance uptake.



This write-up makes the case very forcefully that it is only when the industry is knowledgeable about the dynamics and nuances of the insured population that it can effectively tackle the situation of the insurance-excluded. A critical analysis of the social demographic status of those who are risk-protected will throw up certain unique and specific trends that can be relied upon to isolate that population so all focus can be geared appropriately towards those who remain excluded.



Sosthenes K. Konutsey is long standing player in the financial services industry – Banking, Insurance and Pensions Administration – and an advocate for Financial Inclusion and Sustainable Development.

Email: [email protected]


Banking / Insurance

EY, Open Banking Nigeria Partner for Financial Services Innovation




Image credit: Financial Times

LAGOS, NIGERIA. 22 July, 2019: Ernst & Young (EY), a global professional services firm, has finalised arrangements with Open Banking Nigeria to develop and advocate for a standard Application Programming Interface (API) for the country’s financial services industry. The partnership will, in addition, transform the management of financial data and extend services to individuals and businesses across Nigeria.

EY, in a statement, disclosed this recently after it inked an agreement with Nigeria’s foremost Open Banking advocate and facilitator, Open Banking Nigeria.

With this agreement, EY joins other leading industry stakeholders to analyse the need of the industry for a common API standard among banks and other financial institutions, support the development of API standards, promote adoption with stakeholders—players and regulators—and enable further innovations in Nigeria’s financial services industry.

The introduction of a unified API across financial institutions creates a foundation upon which data can be effortlessly accessed and securely shared, real-time. It would, among others, empower individual and corporate users of services within the payment ecosystem to instruct their service providers to share their bank balance and transaction information with regulated Account Information Service Providers (AISPs).

This interoperability would result in the development of modern payment services, cost savings for operators and increased innovation while also guaranteeing information security and privacy, which would not cause an uneven playing field for industry players.

Also Read Pineapple: Providing fair, instant insurance of the things you own with a snap of a picture

According to a statement by Dapo Adewole, Partner, Technology Advisory, at EY: “As part of our commitment to support the building of a better working world, EY Nigeria is working with stakeholders to use open banking to reshape financial services, especially as regulators and governments seek to increase competition and choice.

“We understand that customers also expect more convenience and flexible access to services, driven by broader digital experience and emerging technology. It is our desire to bring this goal to fruition, while working with other player in the industry.”

Welcoming EY Nigeria to Open Banking Nigeria, Ope Adeoye, a trustee at Open Banking Nigeria, noted the firm’s top-notch contributions, along with other stakeholders, would lead to the development of the next generation of API standard for the Nigerian financial services industry.

Already acknowledged as the future of banking on the globe, the adoption of Open Banking in Nigeria would enhance the service offerings of players in the financial services industry, improve customer engagement and build new digital revenue channels. It would also transform the operation of other industries, including telecommunications, power, hospitality, retail, and insurance, seeking to leverage data for the improvement of their operational scope and service offerings to clients.


Credit: Open Banking Nigeria

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Banking / Insurance

GTBank Named Best Bank in Africa at Euromoney Awards




Lagos, Nigeria – July, 2019: Foremost African financial institution Guaranty Trust Bank plc has been named the Best Bank in Africa 2019 by Euromoney at its annual Awards for Excellence, which held in London on Wednesday, July 10, 2019 at the London Hilton Hotel, Park Lane. GTBank was also named the Best Bank in Nigeria for a record ninth time, reflecting the Bank’s position as one of the best managed financial institutions in the country, with strong and focused leadership that keep the business in a constant state of re-invention and innovation.

Now in its 50th year, Euromoney is the leading publication for covering the growth of international finance. Euromoney’s Awards for Excellence are the awards that matter to the banks and bankers who matter. This year, Euromoney received almost 1,500 submissions from banks in an awards programme that covers 20 global awards, more than 50 regional awards, and best bank awards in close to 100 countries. The Magazine’s Awards for Excellence celebrates the best banks around the world by recognizing institutions that have demonstrated leadership, innovation, and momentum in the markets they operate. In selecting its award recipients, Euromoney combines quantitative and qualitative data to honor institutions that have brought the highest levels of service, innovation and expertise to their customers.

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Key to the emergence of GTBank as the Best Bank in Africa and the Best Bank in Nigeria, is the Bank’s digital drive and its clarity of vision in reimagining the future of banks and banking. The Euromoney awards also recognized GTBank’s commitment to leading the future of banking as well as its consistent long-term strategy led by a senior management team that abhors complacency and keeps the business in a constant state of innovation.

Commenting on the Bank’s Euromoney awards, the Chief Executive Officer of GTBank, Segun Agbaje, said; “We are delighted and proud to win the Euromoney Awards for Africa’s Best Bank and Nigeria’s Best Bank. These awards reflect the progress we are making in delivering the best banking experience that captures what customers want in the world of today and tomorrow. They are also a testament to our leading role in driving world class corporate governance standards, excellent service quality and innovation in Africa’s banking industry.

He further stated that; “At GTBank, we are passionate about building the bank of the future by leveraging the best of technology to add real value to our customers’ lives, and these awards illustrate the hard work and commitment of our staff, management and board towards achieving this goal.

GTBank has consistently played a leading role in Africa’s banking industry. The GTBank brand is regarded by industry watchers as one of the best run financial institutions across its subsidiary countries and serves as a role model within the financial service industry due to its bias for world class corporate governance standards, excellent service quality and innovation.


Credit: GTBank

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Banking / Insurance

Digital Bank: Standard Chartered launches in three more African countries




JOHANNESBURG – Multinational banking and financial services company Standard Chartered on Friday announced the launch of its digital bank in Botswana, Zambia and Zimbabwe as part of its transformation strategy in Africa, following similar moves in Uganda, Tanzania, Ghana and Kenya during the first quarter of 2019 and in Côte d’Ivoire last year.

The expansion comes amid rising demand for wider access to digital services in Africa, which has a growing population and economy.

“This is a significant achievement for the bank having now launched digital banks in 8 markets in 15 months of our initial launch in Côte d’Ivoire,” Standard Chartered regional CEO for  Africa and Middle East Sunil Kaushal said.

“The growing population of Africa is demanding faster and more convenient banking and it has been very rewarding to witness increased acceptance and a growing demand for our digital products across the continent. We have an exciting pipeline of product launches on this platform which will position us as the premier digital bank in our markets of choice.”

In Côte d’Ivoire the digital bank has exceeded initial expectations with 18,000 new account openings, while in Uganda it has seen an eight-fold increase. In Tanzania the bank has signed up more new customers since launching in March this year than in the whole of 2018.

It is expected to continue its digital expansion in Africa with another launch planned in September for Nigeria.

Standard Chartered has also launched SC Keyboard, which allows customers to access a variety of financial services from within any social or messaging platform without having to open the banking app.

Initially launched in Kenya, Uganda, Ghana and Tanzania, the solution is a first for the bank in Africa and will be rolled out to Botswana, Zambia, Zimbabwe and Nigeria throughout the rest of the year.

The keyboard-based banking solution allows clients to transfer money in real-time, pay utility bills and instantly check balances from within any social or messaging platform.

– African News Agency (ANA)

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