The Covid-19 pandemic has set local and foreign companies’ targets and business goals behind. Service workers, especially in hospitality, arts and media, mining, and contractor spaces, have been impacted to the point of closing their businesses.
Despite this, projections by the African Development Bank, McKinsey and others suggest hope for growth and expansion for Africa’s future. Yet, does this optimism help recover a COVID-19 pandemic-impacted economy, or do we need to look to insurance as an underexplored opportunity?
Before COVID-19, numbers showed that the African insurance market would grow at compound annual growth rates of 7 percent per annum between 2020 and 2025; nearly twice as fast as North America, over three times that of Europe, and better than Asia’s 6 percent.
Closer home, though the insurance penetration rate is still below 2%, Ghana’s insurance market has become more innovative with steady progress. Insurance is becoming more visible; service levels are improving, and literacy in insurance amongst the Ghanaian public has been relatively better. If sustained and improved, we believe these strides would help create wealth and eradicate poverty in the country. Therefore, insurance should be a strategy for poverty eradication and Life sustainability.
Life insurance companies have innovative products that permit small and large businesses to grow sustainably by insuring their most valuable resources, their people. In addition, companies like Hollard Life Assurance make it possible for families to secure better futures for their children through guaranteed education and savings towards specific future needs. They are even ensuring a decent farewell to loved ones. These are critical to sustaining economic growth and eradicating poverty amongst the Ghanaian populace.
Imagine a Group life Insurance policy that ensures that organizations have adequate cover for employees, compensate employees in the events of a work-related injury, cover contingencies like Natural death, Accidental Death, Total and Permanent Disability, Critical Illness and Medical Reimbursement. Critical illnesses like stroke, cancer and others come with considerable costs that can cripple businesses and families. Group Life Insurance steps in to lift the financial burden off the Employer. In addition, this policy allows the company to retain its cash and concentrate on its core business to contribute to national development.
Most families are still dependent on a single significant breadwinner, whose demise can financially ruin the entire family and end the younger ones’ dreams, especially. Likewise, brilliant children have lost out through their parents’ death or critical illness. We can mitigate this problem via a well-designed individual life insurance product that can provide financial support for loved ones even after the breadwinner’s demise.
Fires, floods, and other natural and artificial disasters consistently ravage markets, shops, private dwellings, etc. Each of these incidents affects the livelihoods of households by halting their businesses and investments. The government may occasionally provide support; however, that may not be adequate to restore the lost assets and enterprises. There are general insurance policies on the market that fit every business size, and these are the bastions of hope in restoring livelihoods after these disasters. The question remains whether business owners are taking advantage of these policies to secure their businesses.
We can learn lessons from Asian Tigers, who have significantly improved the economic conditions of their people and remarkably eradicated poverty. China, for example, has moved over 300 million people from poverty and improved the lives of the people and their incomes sustainably. Before 1949, insurance was alien to the Chinese people until its inception in their development plan. The Swiss Re Institute estimates China’s total life insurance premiums to have risen to CNY 2700 billion in 2017, representing 22.5% real growth from the previous year. An increase in life insurance penetration powerfully drove China’s development, which saw new distribution channels take prominence. The Chinese economy will move in tandem with increased growth in their life insurance premiums which are forecast to rise by an average of 9.3% per year in real terms from 2019 to 2028.
Any discussion on poverty eradication and life sustainability should not ignore how valuable insurance is. It is great to create and sustain wealth via sophisticated measures. However, government policies aimed at ensuring the economic wealth of the citizenry must include insurance. Sometimes, the relevance of insurance becomes so crucial that it must be made mandatory. Hence the need for policymaker action.
I look forward to a future where governments, policymakers, businesses, and individuals will acknowledge the relevance of insurance in eradicating poverty and sustaining lives. When this happens, I know it will positively elevate insurance penetration from its current unimpressive rate to an appreciable level. This dream of seeing insurance accessible to all keeps the staff of Hollard Ghana going. We want to enable more people to create and secure a better future because Ghanaians deserve it.
