Why Fraud Prevention Is a Top Priority for Insurers in Ghana

From fake motor insurance stickers to inflated claims and premium undercutting, fraud is costing Ghanaian insurers millions of cedis every year. It is a problem that affects everyone—not just insurance companies, but honest policyholders who end up paying higher premiums. This ASJ article explains why fraud prevention has become a top priority for insurers and what is being done about it.

Introduction

Fraud is a serious problem for the insurance industry in Ghana. It takes many forms. Some people buy fake motor insurance certificates from roadside vendors. Others exaggerate claims or stage accidents. Some healthcare providers bill for services they never delivered. And some insurance companies themselves undercut premiums in ways that harm the entire market.

The cost is huge. Deloitte Ghana’s Partner, Assurance, Dr Kwabena Situ, has said that fraud makes companies “lose lots of money.” He explained that “resources that can be channeled into other areas of the businesses to grow the firms are being lost to fraud” .

According to Dr Situ, about 5% of revenue in Ghana is lost to occupational hazards . That is a significant amount of money leaving the industry unnecessarily. When insurers lose money to fraud, they must raise premiums to stay in business. That means honest policyholders end up paying more.

This ASJ article explains why fraud prevention matters, what types of fraud exist, and how regulators and insurers are working to tackle the problem.

What Types of Insurance Fraud Exist in Ghana?

Insurance fraud in Ghana comes in many forms. Here are the most common ones.

Fake Motor Insurance

This is perhaps the most widespread problem. As one industry observer noted, across West Africa, you can buy a motor insurance certificate at a roadside stand for a small amount. It looks official. It has a policy number. It might even pass a visual check at a police checkpoint. But it is not real .

When an accident happens, the driver discovers the difference between a certificate and actual coverage. No payout. No support. No legal recourse . The problem is not that drivers do not want coverage—it is that the verification and distribution infrastructure has not been strong enough to serve them properly .

Inflated or False Claims

Some policyholders exaggerate the value of what they lost. Others stage accidents or thefts to claim insurance money. In health insurance, some healthcare providers bill for services they did not provide.

A recent academic study found that in health insurance, the most common approaches to fraud detection use supervised graph-based techniques, with F1 scores ranging from as low as 0.15 to as high as 0.948 . This shows that detection is possible, but it requires sophisticated technology.

Premium Undercutting

This is when insurance companies charge premiums that are too low, often to attract customers. The Acting Commissioner of Insurance, Dr Abiba Zakariah, has described this as a serious problem that “continues to hinder growth in the country’s insurance penetration rate” .

She lamented the “increasing compromises by some industry players on ethical practices,” stressing that “ethical integrity is non-negotiable” . A disregard for ethical standards, she said, amounts to a “race to the bottom” with the potential to derail the industry’s progress .

Identity Fraud

Fraudsters sometimes use fake identities to take out policies or make claims. This is why the National Insurance Commission has made the Ghana Card mandatory for all motor insurance purchases and renewals from January 1, 2026 .

The NIC explained that the initiative will “improve claims handling,” “strengthen Know-Your-Customer (KYC) & Anti-Money Laundering (AML) compliance,” “reduce fraud,” and “align Ghana with global financial service standards” .

Why Fraud Prevention Matters

1. It Protects Policyholders

When insurers lose money to fraud, they pass the cost on to policyholders through higher premiums. Honest customers end up paying for the dishonest.

Fraud also damages trust. When people hear stories about fake insurance or denied claims, they become reluctant to buy insurance at all. This keeps insurance penetration low, which is bad for everyone.

The NIC has noted that building trust is critical to driving sustainable growth in the insurance sector . Fraud prevention is essential to building that trust.

2. It Protects the Industry’s Reputation

The insurance industry relies on trust. If people believe insurers are dishonest or that fraud is widespread, they will not buy insurance.

The Ghana Insurers Association has developed a Code of Conduct that emphasizes “integrity, professionalism, and fair dealing with policyholders and other stakeholders” . Members are required to ensure that “advertisement and marketing of products are easy to understand and accurately represent the product” . This is all about building and maintaining trust.

3. It Saves Money for Everyone

Fraud costs money. The resources lost to fraud could be used to improve products, lower premiums, expand coverage, or invest in new technology.

The NIC’s three-pillar strategy for resetting the insurance sector includes “Insurance Market Sanitization”—identifying and eliminating unethical practices . This is a direct recognition that fraud prevention is essential for a healthy industry.

What Is Being Done to Prevent Fraud?

1. The Ghana Card Mandate

From January 1, 2026, the Ghana Card is required for all motor insurance purchases and renewals . Corporate clients must also provide their Tax Identification Number .

This policy is designed to address identity fraud and make it harder for fraudsters to operate. The NIC says it will help with “claims handling,” “KYC and AML compliance,” and “reducing fraud” .

2. Digital Technology

Technology is a key tool in fraud prevention. Babajide Okunlola, an Associate Director at Deloitte Nigeria, has said that fraudsters today are using technology, so insurance companies must also “start thinking about technology to curtail the fraud” .

The Ghana Insurance Fraud Detection Market is expected to grow significantly in the coming years, driven by “the rising prevalence of fraudulent activities in the insurance sector, coupled with the implementation of stringent regulations to combat fraud” . Advancements in AI and machine learning are expected to play a crucial role .

One example is AI-powered vehicle inspection technology. This allows for real-time verification of coverage authenticity, damage detection from a smartphone in under 60 seconds, and fraud flagging before a claim is even filed . This technology is already being deployed in Nigeria and is relevant for the Ghanaian market .

3. Regulatory Oversight

The NIC is strengthening its regulatory oversight. This includes:

• Risk-Based Supervision (RBS): A framework to detect and respond to market misconduct promptly .

• Enforcement of compulsory insurance: This includes motor third-party, marine cargo, commercial property (fire), professional indemnity, and public liability insurance .

• A Customer Satisfaction Index: To improve service delivery across the industry .

The NIC has also established a Committee on Premium Undercutting and Unethical Practices, which presented its report and recommendations in August 2025 . The report called for “strict enforcement of claims payment requirements,” “preventing unfair pricing,” “promoting fair competition,” and “penalising unethical practices” .

4. Industry Self-Regulation

The Ghana Insurers Association (GIA) is promoting industry standards and best practices. The GIA’s Code of Conduct includes guidelines on transparency, confidentiality, and fair dealing .

The Association also offers training and professional development programs covering areas like underwriting, risk management, claims handling, and customer service . Well-trained staff are less likely to fall for or participate in fraud.

The Human Cost of Fraud

Behind the numbers and policies, fraud has a real human cost.

When a driver buys a fake insurance certificate, they may save a few cedis upfront. But if they have an accident, they have no coverage. They must pay for repairs themselves. If someone is injured, they may face lawsuits.

When honest policyholders pay higher premiums because of fraud, that money could have been used for school fees, business investment, or savings.

When an insurance company loses money to fraud, it may have to reduce its workforce or cut services.

Fraud is not a victimless crime. It affects everyone. This is why fraud prevention is a top priority for insurers.

ASJ Conclusion

Fraud prevention is a top priority for insurers in Ghana because fraud costs money, damages trust, and hurts honest policyholders. The problem is serious—with an estimated 5% of revenue lost to occupational hazards and widespread fake motor insurance in the market .

But the response is also serious. The National Insurance Commission is implementing new regulations, including the Ghana Card mandate for motor insurance . The Ghana Insurers Association is promoting ethical standards and best practices . And technology, including AI and digital verification systems, is being deployed to detect and prevent fraud .

The message from regulators and industry leaders is clear: fraud will not be tolerated. The goal is to build an insurance industry that is fair, transparent, and trustworthy—for the benefit of all Ghanaians.

Quick Facts

Frequently Asked Questions

1. What is insurance fraud?
Insurance fraud is when someone deliberately deceives an insurance company to get money or benefits they are not entitled to. It includes fake policies, inflated claims, and identity theft.

2. How common is insurance fraud in Ghana?
It is a significant problem. Approximately 5% of revenue is lost to occupational hazards, and fake motor insurance certificates are widespread .

3. What is the Ghana Card mandate for motor insurance?
From January 1, 2026, the Ghana Card is mandatory for all motor insurance purchases and renewals. Corporate clients must also provide their Tax Identification Number .

4. How does the Ghana Card prevent fraud?
It strengthens identity verification, improves claims handling, and makes it harder for fraudsters to use fake identities or submit fraudulent claims .

5. What is premium undercutting?
This is when insurance companies charge premiums that are too low, often to attract customers. The NIC has described it as a practice that “continues to hinder growth in the country’s insurance penetration rate” .

6. How is technology helping to prevent insurance fraud?
AI and machine learning are used for fraud detection and flagging suspicious claims. AI-powered vehicle inspection allows for real-time verification of coverage authenticity .

7. What is the National Insurance Commission doing to prevent fraud?
The NIC is implementing a three-pillar strategy that includes market sanitization, strengthening enforcement, and promoting transparency. It has also established a Committee on Premium Undercutting and Unethical Practices .

8. Why should honest policyholders care about fraud?
Because fraud costs money. When insurers lose money to fraud, they raise premiums to compensate. Honest customers end up paying for the dishonest.

9. How can I avoid fake motor insurance?
Always buy from a licensed insurer or broker. Check the NIC website for a list of licensed companies. Use the *920*57# USSD code to verify your policy in the Motor Insurance Database.

10. What is the Motor Insurance Database?
It is a national system that records all valid motor insurance policies in Ghana. It helps the police and the public verify insurance instantly .

11. What should I do if I suspect insurance fraud?
Report it to the National Insurance Commission. The NIC investigates complaints and works with law enforcement to prosecute offenders.

12. Is the insurance industry doing enough to prevent fraud?
The industry and regulator are taking significant steps, including new regulations, technology adoption, and promoting ethical standards. The Ghana Insurance Fraud Detection Market is expected to grow significantly in the coming years

Source: Accra Street Journal 

Last Updated on August 18, 2026 by Samuel Kwame Boadu

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

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