Ghana’s Insurance sector has taken some hit due to the novel Coronavirus pandemic, specifically life insurance.
According to the National Insurance Commission, this could significantly affect Ghana’s insurance penetration and insurance companies.
Speaking to Citi Business News, a Deputy Director of the NIC, Mr. Michael Kofi Andoh, explained that, because life insurance policies are mostly sold physically to the public, the three-week partial lockdown and the subsequent restrictions on movement has slowed down business.
This means, Ghana’s insurance penetration which is still around 2% may not witness an increase if the situation persists for a while longer.
“There are some expected or assumed cases but because we don’t have the figures now, we don’t know exactly to what extent. We are expecting that especially the life side will be hit a little bit harder because life is usually sold by agents. An analysis of our distribution channel tells us that about 65% of life businesses is sold by agents and so when you have this lockdown, and social distancing, you have businesses slowing down because insurance is sold and not bought.”
“…So, when you cannot get close to people and sell to them then it’s going to affect the business. So, we are expecting that both life and non-life will be impacted, but because the day to day selling goes more with the life we are expecting that the life will be hit harder than non-life,” he said.
Following the outbreak of the novel Coronavirus in the country, different sectors of the economy have been affected with several job losses envisaged.
While everyone is concerned about public health, insurance companies will also have to deal with other unique and direct impact of this outbreak. These includes increase in travel claims, business interruption claims and loss of revenue.