The executive chairman of the GLICO Group, Kwame Achampong-Kyei, has bemoaned the low penetration of insurance cover amongst the populace.

He believes for the insurance sector to get the required mileage and gather more patronage, it is important “to go back to basics”.

According to him, when GLICO started out in 1987 he had a clear vision to make insurance accessible to every household in Ghana.

At the time, this meant the development of simple products arising from clear consumer needs, affordable premiums and maintaining a human face to the company’s customer services.

These considerations he believes have given way to less customer-focused strategies and tactics in recent times.

The 2008 CIM Ghana Marketing Man of the Year, said the hurdles that undermine penetration of insurance in the country mean that consumers must be “eased into insurance cover, beginning with pricing that makes it easy to pay in a sustainable way and mobile face-to-face customer service that reduces the effort of transacting with insurance companies.

“Of course, taking customer service to them can be costly and it must be done in ways that are both effective and efficient. For instance, by using our M-agents who go to specific enclaves and serve groups of customers at a time, the cost of service is reduced significantly.

“Recently my team has deepened its suite of services further by introducing mobile alerts of premium payments, a step that deals with the credibility issues within the industry.”

His comment comes off the back of the Bank of Ghana hinting it will be laying before parliament a Payment Systems and Services Bill aimed at facilitating the provision of insurance services by the various banks in the country.

If passed into law by the end of 2018, it will improve financial inclusion and broaden the insurance penetration rate in the country.

A review of data from the Ghana Living Standards Survey (6th Round) undertaken by the Ghana Statistical Service and published in 2014, shows that household penetration of insurance has not been as stark as the reported data on the individual uptake.

The report indicates that more than three out of five (60%) urban households have short-term insurance policyholders.

Almost 90 percent of urban households have people who hold a commercial or business policy, 83.3 percent hold property policy and 77.4 percent hold vehicle or motor policy.

Medical (38.1%), funeral (25.7% and vehicle or motor (22.6%) are the main insurance policies held by rural households.

The proportion of household members with long-term insurance policies follows the same pattern as for short-term holders, with more than 70 percent holding a long-term policy.

Mr Achampong-Kyei is convinced that, GLICO – which was adjudged by the Chartered Institute of Marketing Ghana (CIMG) as Insurance Company of the year in 1997 and 1999 – has lived its mission of making insurance accessible to every household by deepening its micro-insurance products and services over the years.

He explained that micro-insurance is the approach of providing insurance cover for low income earners against accidents, illness, death in the family, natural disasters and similar risks in ways that ensure that insurance premium payments are tailored to specific needs, incomes and risk levels.

In practice, GLICO has, and continues to serve, informal sector businesses that are under-served by mainstream insurance schemes.

GLICO’s incursion into the micro-insurance sector can be traced to as far back as 1987, when it introduced a micro-insurance product called the GLICO Depositors Life Plan.

The product, which has enjoyed significant patronage at the Abossey Okai market (a main spare parts hub in Ghana) to date, was introduced to assist policyholders in creating a short-term accumulation of savings with interest and insurance protection.

It was later embraced by many other consumer groups and after a review and relaunch into the current ‘Edwa Nkosuo’ (to wit “business progression”) it has achieved strong penetration within the informal sector, amongst NGOs and market circles across the country.

GLICO Life also introduced a second micro-insurance product called Anidaso (which means ‘hope’). The original concept was launched in 2003, in partnership with Care International (an NGO) and targeted at low-income earners in the rural area to offer insurance assistance in the event of loss so that they can continue trading.

Mr Acheampong-Kyei concedes that there is a growing middle class in the Ghanaian market and it is important for insurance companies to embrace technology and consumer segmentation approaches that optimise product development for such groups.

He however believes that, since there is still a large mass of consumers at the lower end of the socio-economic pyramid as well as a bourgeoning informal sector in Ghana, there is a need to re-introduce a no-frills approach to the insurance business.

In many ways, according to him, there is a need to return to the building blocks that saw insurance companies like GLICO growing to become what they are today.



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