Sunday, December 8, 2019

Industry Performance


A research conducted by KPMG in 2014 showed that financial and insurance activities recorded an average growth rate of 4.8% from 2009 to 2013.

In 2013, it accounted for 6% of GDP.

Financial and insurance activities form a core component of the services sector and have been growing over the last few years.

From 8.8% of Services GDP in 2009, financial and insurance activities increased to 13.2% of Services GDP in 2013.

Source: GSS& KPMG Analysis
Source: GSS& KPMG Analysis

The financial and insurance sector has been growing consistently since 2009.

From GH¢1.5 billion in 2009, it grew by 45% in 2010.

After 10% growth in 2011, it further posted strong growths of 40% and 72 in 2012 and 2013 respectively.

Source: KPMG & GSS
Source: KPMG & GSS

Analysis of the graph above shows that the Ghanaian life insurance market is consolidated with the top five companies accounting for about 80% share in 2012 (up from 78% in 2011).

There were 19 life insurers as at May 2014.

In 2012, the life insurance gross written premium (GWP) stood at GHS355.8 million, witnessing a growth of 31.7% (y-o-y).

Ghana’s top three life insurers’ performance in 2012 is summarised below:

– SIC Life Insurance collected GHS100.3 million representing a premium growth of 39% (y-o-y).

SIC is listed on the Ghana Stock Exchange and owned by government (40%) and others including institutions and individuals (60%).

– Enterprise Life Assurance reported total premium collection of GHS89.1 million, representing a growth of 45% (y-o-y).

– Glico Life Insurance reported a gross premium of GHS36 million witnessing 4.65%.

non life

The Ghanaian non-life insurance market is relatively fragmented with the presence of 26 players as at May of 2014.

The top five companies accounted for 60.6% share of the total market in 2012 (little movement from 60% in 2011).

In 2012, non-life insurance GWP stood at GHS 494.9 million, witnessing a growth of 38% (y-o-y) from 2011.

Top three non-life insurers’ performance in 2012 is summarized below.

SIC Insurance’s GWP increased by 38% (y-o-y) to GHS 109.97 million.

Star Assurance reported a premium of GHS60.895 million, witnessing 70% growth(y-o-y).

Enterprise Insurance witnessed 25% (y-o-y) growth in GWP in 2012

Foreign participation in Ghana’s insurance market is mainly by large African insurance companies from Nigeria, South Africa and Ivory Coast through the local subsidiaries.

European insurance companies are also expanding their presence in Ghana to capitalize on economic growth, further oil and gas exploration, political stability and a good regulatory system

. Large European companies, such as Old Mutual Plc and Prudential Plc, have acquired majority stake in local life insurance companies.

Source: KPMG
Source: KPMG


The asset quality ratio which seeks to establish the percentage of the company’s assets that are in investment instruments as to operational assets and depreciable assets.


According to the KPMG report, the ratio calculates the proportion of the premiums that are not passed on to reinsurers.

Retention among Life insurers in Ghana are generally high.

This can be seen in the table where retention ratio remained 97% in both 2011 and 2012.

Source: KPMG
Source: KPMG

This ratio measures growth or contraction in the company’s gross premium relative to the previous years.

The industry average was 41% which represented an increase in the 2011 growth of 29%.

The top five (5) companies which recorded the highest ratios are; Colina Insurance Co. Ltd – 206% , NEM Insurance Ghana Ltd – 85%,  Star Assurance Co. Ltd – 76% , Activa International Insurance Co. Ltd – 66% ,Equity Assurance Co. Ltd. – 66% , Glico Life Insurance Co. Ltd – 183% and  Express Life Insurance Co. Ltd – 138%.

Source : GSS & KPMG
Source : GSS & KPMG

This ratio is calculated as the provision for outstanding claims divided by the Net Earned Premiums.

It compares the relationship of provisions for outstanding claims to net earned premiums to assess whether the company is adequately reserving for claims in process.

The internationally accepted range for this ratio is between 30% and 50%.