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The Deputy Finance Minister, Abena Osei Asare, has said that “proper and effective regulatory framework” is needed to deepen insurance penetration in the country.

“Investors hesitate because they believe that it’s not been backed by proper legal framework. People don’t do insurance because they don’t feel that it is well regulated like banks,” she said.

She was speaking at the 4th National Life Insurance Conference in Accra, themed: “Extending coverage of life insurance in Ghana: A collective responsibility”.

Ms. Asare noted that a new draft insurance bill, currently at stakeholder consultation level, is being processed as part of efforts to properly regulate the sector.

The draft bill, she explained: “Will provide a framework, something that will guide us regarding the dos and don’ts, and the punitive actions should you break away from the law. So it will give all of us some confidence.

Just like we have the Banking Act, and the other regulatory frameworks guiding the banks and other financial institutions; that’s how we want to do this one and I believe that this, coupled with technology will go a long way to increase the penetration of insurance.”

The Minister was upbeat that once the framework is in place, it will give investors and stakeholders the sort of warranty they need to invest their resources into the sector.

Ms. Asare, also reiterated that the government is committed to doing everything possible to support the growth of the sector, particularly in the area of ICT infrastructure and issues concerning data management.  

Insurance penetration still stands at about two percent of the population—which is below the African average of 3.5 percent. The contribution of the sector to GDP is also just about two percent.

The Commissioner of Insurance, Lydia Lariba Bawa, said high insurance penetration, if realised could be a very important tool for poverty reduction, promotion of social and economic welfare, and ensuring financial stability.

“Indeed, a vast majority of Ghanaians lack access to financial services in general, and insurance in particular. It will take a concerted effort to extend coverage to them.

There is the need to improve the capacity of the industry and provide appropriate regulatory interventions to improve access to insurance for the average Ghanaian,” she said.

The Commissioner advised insurers on the need to come out with appropriate products that meet the needs of the various segments of the population, particularly products designed to match both occupational and lifestyle needs of Ghanaians.