Ghana’s persistently low insurance penetration is undermining the sector’s ability to pay claims swiftly and deepen public trust, according to Dr. Kingsley Agyemang, who says the core problem is simple: too few people are buying cover.
Speaking on Adom TV’s Evening News, Dr. Kingsley Agyemang – Member of Parliament (MP) for Abuakwa South, said insurance works only when large numbers participate. “Insurance thrives on what we call the principle of large numbers,” he noted. “When more people contribute, the pool can comfortably pay the few who make claims. But when participation is low, even routine claims strain the system.”
Dr. Agyemang offered an everyday analogy: coin tossing. With many tosses, outcomes even out; with only a handful, results can be skewed. “If you toss a coin a thousand times, you’re likely to see a balance between heads and tails,” he said. “But toss it just ten times and you might get only heads. Insurance behaves the same way—the larger the pool, the more predictable the claims, the steadier the payouts.”
The implication, he argues, is that low patronage makes it difficult for insurers to build strong, diversified portfolios. Smaller pools mean volatile claims experience, tighter cash flow, and heightened caution in underwriting. Over time, that can translate into pricier premiums for the few who do buy policies, feeding a cycle of reluctance and mistrust.
While acknowledging improvements over the past two decades, Dr. Agyemang maintained that progress has not kept pace with the demands of today’s economy. He identified public education as the industry’s most urgent task.
“The consumer is not consuming—and that is where the gap is,” he said. “Insurance firms must step up their education drive, but the media also has the biggest responsibility.”
For many households, insurance remains abstract until disaster strikes. Dr. Agyemang said sustained outreach—translated into local languages, using relatable scenarios—can demystify how premiums are priced, why exclusions exist, and what to do at claim time. He urged broadcasters, community radio, and digital platforms to prioritize practical explainers over occasional promotional spots.
Consumer confidence ultimately stands or falls on the claims experience. In thinly subscribed markets, even valid claims can be delayed, feeding perceptions that insurers are unwilling to pay. Dr. Agyemang warned that the industry must prove reliability at the moment of truth.
“Nothing rebuilds trust faster than prompt, transparent claims handling,” he said, adding that timely updates, clear documentation requirements, and fair dispute resolution should be non-negotiables across the sector.
Dr. Agyemang also pointed to portfolio building—moulding a balanced mix of life, health, motor, property, agriculture, and micro-insurance lines—as the bedrock of stability. When more Ghanaians buy basic covers, insurers can smooth out risk across thousands of policies rather than a narrow base of clients.
This diversification, he explained, helps carriers ride out spikes in particular categories (for instance, a wave of motor theft or an unforeseen health trend) without destabilizing the entire firm. “With strong portfolios, premiums can remain affordable, and claims can be paid without drama,” he said.
From market stalls to ride-hailing apps, bundling simple micro-covers into common transactions can normalize insurance and widen the pool. “If everyday platforms embed cover, people will experience the value without friction,” Dr. Agyemang suggested.
He urged insurers to ditch jargon in policy documents and adopt plain-language summaries that spell out benefits, exclusions, and claim steps on a single page. Community demonstrations—how to file a motor claim after a fender-bender, what receipts to keep for health claims—can cut confusion that often breeds mistrust.
No-claims bonuses, telematics-based discounts for careful drivers, and loyalty benefits can reshape the perception that premiums are a sunk cost. “People respond when they feel seen and rewarded,” he said.
Beyond advertising, he called for editorial partnerships: regular explainer segments, myth-busting series, and case-study storytelling that follows a policyholder from purchase to payout. “The media can make or break understanding,” he emphasized.
While not delving into policy specifics, Dr. Agyemang hinted that consistent standards on disclosures and claims timelines would help align customer expectations and reduce disputes.
Dr. Agyemang acknowledged that Ghana’s insurance landscape today is stronger than it was 20 years ago—more products, better capitalization, wider reach. Yet he stressed that the growth curve lags behind the economy’s evolving risks, from urban mobility to climate-linked shocks.
“The industry is not what it used to be; it has improved,” he said. “But the progress we are making doesn’t match the demands of today.”
Insurance is a numbers game. When participation is broad, premiums stay fair and claims get paid. When it’s narrow, everyone feels the pinch—insurers, policyholders, and the wider economy. Dr. Agyemang’s message is blunt: until more Ghanaians buy cover, the system will struggle to deliver the reliability people expect.
Often referred to in statistics as the law of large numbers, it means that outcomes become more predictable as the number of observations grows. In insurance, the “observations” are the many policyholders paying premiums and the relatively small number who make claims. A bigger pool lets insurers forecast losses more accurately—and pay claims more smoothly.
