It is a common knowledge that paying insurance premiums is somewhat easier than making an insurance claim. Aside the rigorous paperwork that insureds have to go through to be compensated for a loss covered by insurance, many Ghanaians do not see insurance a necessary investment.
However, there are numerous reasons you need a personal or business insurance. Okay, so let’s look at these scenarios – you own a fashion shop, and you wake up one day only to realize the shop was burgled the night before.
Or your booming local dish restaurant is razed down by fire from a gas accident from the kitchen.
This can be bad for business, and both or any of these events can put you out of business. Customers will begin to buy from competitors, revenues will fall and your business will close eventually.
Just like most business owners, you will probably be thinking of any available ways to finance your business again.
But that comes with its challenges and costs. For instance, if you apply for a small business loan, you have to payback with huge interest.
If your turn to venture capitalists, your risk a share of your business ownership too. So, your best bet to get back to business is insurance.
Insurance will not only protect you from cost of court battles, damage to property or third party injuries, but it will give you the peace of mind as a business owner.
In spite of these benefits, the 2019 annual report of the National Insurance Commission (NIC) revealed that, insurance penetration in Ghana is still less than 2%.
How safe is insurance investment in Ghana?
Now, there seem to be some good reasons for optimism in the insurance industry in Ghana.
Although a majority of the public still have mixed feelings in dealing with insurance providers, a recent research by the NIC has shown that the confidence of Ghanaians in insurance is on the rise.
According to the NIC, the overriding perception of insurance companies is that they are very needed, but not liked, relied on, but not trusted.
In its confidence index report, the Commission found that data increased to an all-time high since its first public perception, awareness and confidence index in 2019.
“The Confidence Index (CI) however has seen significant increase, rising to an all-time high of 0.5813 from 0.5666 in 2020 and 0.4650 in 2019.”
The confidence index 0.5813 is higher than the 2020 estimate by 1.5 percentage points.
The data which was collected from a sample size of 1613 also showed that contrary to the confidence index, the knowledge index has seen a downward trend over the three-year study period.
“Knowledge index in 2019 stood at 0.5992. The figure in 2020 was 0.5392 while the knowledge index recorded in 2021 was 0.5132.” – NIC Report.
As the regulator of the insurance sector in Ghana, the NIC regularly conducts surveys to understand the people’s perception about insurance to effectively make policy decisions that benefits all.
This report will not only benefit insurance companies but also, the investing public.