Ghana’s Insurers May Be Chasing the Same Policyholders Instead of Expanding the Market

With insurance penetration at just 1.0 per cent of GDP, a fundamental question confronts Ghana’s distribution system: how much of the industry’s commercial activity is creating new coverage, and how much is simply moving existing customers between channels?

Perhaps the most important question facing Ghana’s insurance distribution system is whether the industry is spending too much energy competing for existing policyholders instead of expanding insurance coverage.

Consider a situation where a business obtains its insurance directly from an insurance company. At the next renewal, an insurance broker approaches the same business, promises better service and transfers the policy to another insurer. A year later, an insurance agent approaches that customer with a different quotation and persuades the business to move again.

The customer remains insured, but the distribution channel and insurance provider have changed.

Such movements are not inherently wrong. Customers have the right to seek better prices, improved coverage and superior service. Brokers and agents also have legitimate commercial reasons to compete for business.

The Redistribution Question

However, when this becomes a dominant feature of the market, an important question emerges: how much of the industry’s commercial activity is generating new insurance coverage, and how much is simply redistributing existing business?

This question becomes even more significant when considered against Ghana’s low insurance penetration.

The Bank of Ghana’s 2024 Financial Stability Review reported insurance penetration of 1.0 per cent based on gross premiums, while the IFRS 17 insurance service revenue measure stood at 0.63 per cent.

Ghana therefore has a substantial insurance inclusion challenge.

The industry needs to reach more households, small businesses, traders, farmers, transport operators and other economic participants who remain outside formal insurance protection.

If brokers, agents and insurers are repeatedly approaching the same pool of already-insured customers, the National Insurance Commission (NIC) should examine whether the present distribution model is producing sufficient market expansion.

The distinction matters for policy. A market where the same large corporate risks are re-intermediated annually may generate commission income and competitive activity, but it does not reduce the number of uninsured Ghanaians — and it leaves the sector’s growth dependent on premium increases rather than new entrants.

The Broker’s Commercial Justification

There is also a fundamental commercial question concerning the role of the broker.

An insurance company can sell its products directly, provide quotations, administer policies and manage claims. A broker, meanwhile, earns commission or other compensation for arranging insurance business and is expected to provide independent advice and represent the interests of the insured.

The broker must therefore demonstrate a clear additional value to justify the intermediary relationship.

This may include:

• Independent comparisons across insurers

• Risk assessment

• Negotiation of policy terms

• Claims support

• Ongoing risk management

But where customers cannot distinguish these services from what insurers already provide, the commercial justification for the brokerage relationship becomes less obvious.

That is not an argument against brokers. It is an argument for clarity about what they are for. In markets with mature insurance penetration, brokers typically earn their place through complex risk advisory — engineering surveys, liability structuring, catastrophe modelling. Where their function reduces to price shopping at renewal, the value proposition narrows considerably.

What the Regulator Should Do

The NIC should therefore examine whether Ghana’s insurance distribution structure is encouraging meaningful specialisation or merely creating several competing channels for the acquisition of the same customers.

The Commission should commission a study examining:

• Policy movements

• Broker appointments

• Agent distribution

• Direct insurance sales

• Renewal transfers

• The actual contribution of each channel to new insurance coverage

The objective should not be to prevent legitimate competition or restrict customers from changing their insurers.

Rather, it should be to ensure that competition contributes to a larger, more inclusive insurance market instead of becoming an expensive struggle over a relatively small pool of existing policyholders.

The distinction between distribution efficiency and market expansion is one that regulators elsewhere have grappled with. Kenya’s insurance regulator has commissioned similar channel studies; Nigeria’s market has seen sustained debate over whether broker commissions suppress product affordability. Ghana’s data would be more useful than Ghana’s assumptions.

Quick Facts

Ghana’s insurance penetration stands at 1.0 per cent of GDP on a gross premium basis and 0.63 per cent on the IFRS 17 insurance service revenue measure, according to the Bank of Ghana’s 2024 Financial Stability Review — a level that suggests a substantial inclusion challenge.

The central question raised is whether brokers, agents and insurers are redistributing existing policyholders between channels — through renewal transfers, broker appointments and agent-driven switches — rather than generating new insurance coverage among households, small businesses, traders, farmers and transport operators.

The concern extends to the broker’s commercial justification: since insurers can sell directly, brokers must demonstrate added value through independent comparisons, risk assessment, policy negotiation, claims support and ongoing risk management. Where customers cannot distinguish these services from what insurers provide, the intermediary case weakens.

The recommendation is for the NIC to commission a study of policy movements, broker appointments, agent distribution, direct sales, renewal transfers and each channel’s contribution to new coverage — not to restrict competition, but to ensure it produces a larger market rather than an expensive contest over a small pool of existing policyholders.

Source: Samuel Kwame Boadu | Accra Street Journal

Last Updated on November 11, 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.

accrastreetjournal.com/