Low insurance penetration challenges markets in Ghana and Ethiopia

Insurance industries in Ghana and Ethiopia are facing significant challenges regarding low penetration rates and the need for structural reforms to reach broader populations.

In Ghana, insurance penetration remains at approximately one percent of GDP. Despite insurers paying out roughly GH¢9.2 million in daily claims, a lack of consumer understanding and accessibility persists. The National Insurance Commission reported that while the knowledge index rose from 51.3 in 2021 to 64.8 in 2024, many citizens still do not grasp how insurance works or why it is necessary.

In Ethiopia, penetration stands at 0.27 percent. Experts at the International Interest-Free Banking and Takaful Forum noted that the sector suffers from weak distribution networks and inadequate digitalization. A critical gap exists in agricultural insurance, which remains below one percent coverage despite agriculture accounting for over 40 percent of Ethiopia’s GDP. Industry leaders are calling for product innovation, micro-insurance, and stronger partnerships between insurers and digital financial service providers to reach the ‘bottom of the pyramid.’