The 2024 Financial Stability Review by the Bank of Ghana shows that insurance penetration in Ghana remained relatively low in 2024 compared to the previous year.

Insurance penetration, measured by gross premiums as a percentage of GDP, held steady at 1.0%, the same level as in 2023.

However, when applying the Insurance Service Revenue approach under IFRS 17 (Insurance Contracts), penetration for 2024 was recalculated at 0.63%.

Despite the low penetration rate, the report expressed optimism for the future, citing factors such as digitalisation, innovation, inclusive insurance, and public education as key drivers expected to boost insurance uptake in the coming years.

"Although insurance penetration remained low, insurance density showed an improvement compared to the previous year," the report noted.

Insurance density, representing the average per capita insurance spending, increased to GH¢202.40 in 2024, up from GH¢195.00 in 2023.

This improvement indicates larger average policy sizes or increased disposable incomes, reflecting a gradual easing of economic pressures on households and businesses.

The report also highlighted strong premium retention in the life insurance segment, which stood at 96.36% in 2024.

This high retention rate underscores the importance of maintaining sound reserving practices, effective asset–liability matching, and prudent investment strategies to safeguard policyholder funds and mitigate solvency risks.

Retention in the non-life insurance segment remained relatively stable, with the retention ratio rising slightly to 73% in 2024, compared to 69% in 2023.

However, the report pointed to a significant rise in overseas reinsurance premium transfers. In 2024, the National Insurance Commission (NIC) approved GH¢814 million in transfers to foreign reinsurers, up from GH¢656 million in 2023.

This increase signals ongoing limitations in local reinsurance capacity and a growing dependence on international reinsurers, particularly for premium payments denominated in foreign currencies.

SP/MA

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