Accra: When I walked into the underwriting department of a prominent Ghanaian insurance firm back in early 2000, underwriting was actually taken seriously. It was part art, part rigorous science, and a whole lot of responsibility.
According to Ghana Web, a quarter of a century later, walking into a Ghanaian insurance office feels like stepping into a completely different world. The industry has grown, with higher insurance revenue on paper and digital apps proliferating alongside flashier marketing campaigns. However, technical underwriting, once the cornerstone of the industry, has suffered a slow decline. The craft of risk assessment has largely devolved into a price war driven by executives focused on meeting targets.
In the early years, technology was introduced to modernize processes. Core insurance software replaced manual rate charts, and proposal forms were simplified. While these changes improved customer experience, they also stripped away critical risk assessment questions, reducing complex risk disclosures to generic forms or quick digital checkboxes.
As the industry raced towards Artificial Intelligence, the focus on analytical thinking diminished. AI has the potential to improve risk evaluation, but if it's used to produce instant, discounted quotes without capturing real risk data, the industry is merely automating poor underwriting practices.
The introduction of more insurers and brokerages into the Ghanaian market led to increased competition and a race to the bottom in pricing. Underwriters lost authority to business development teams, and high domestic yields masked underlying issues. Brokers drove rates down, and consumers viewed insurance as a regulatory obligation, shopping for the cheapest price.
The Ghanaian market, with non-life insurance service revenue around GH?5.8 billion (~$540 million USD) as of Q4 2025, is fragmented among nearly 27 companies. The top five players dominate, leaving smaller companies to fight over the remaining market share. High overhead costs and small revenue force these companies into a cycle of rate-cutting to sustain operations.
Challenges like 'Political Business' and the Domestic Debt Exchange Programme (DDEP) have further strained the industry. The DDEP led to financial losses, and IFRS 17 exposed underwriting deficiencies by separating insurance service results from investment income, forcing immediate recognition of losses.
Efforts to consolidate the market through raising the Minimum Capital Requirement (MCR) have been met with resistance due to corporate culture and shareholder mindsets. Risk-based capital frameworks are pushing the industry towards more sustainable practices, but consolidation may not occur through traditional mergers.
The way forward involves embracing true consolidation, using technology for intelligent risk assessment, re-empowering underwriters, and strengthening technical discipline on large risks. Tariff systems may need reconsideration to foster healthy competition.
Ultimately, the industry must move away from reliance on high investment yields and restore technical discipline to thrive in a more sustainable manner.