This study has been commissioned by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), on request of the National Insurance Commission (NIC) which is the regulatory and supervisory authority of the insurance sector in Ghana. The support is part of a component of the German and Ghana Governments’ ‘Programme for Sustainable Economic Development (PSED)’ which is dedicated to promoting the development of insurance in Ghana (PromIGH) Ghana. The objective of the study was to carry out a detailed risk assessment of the mobile insurance landscape in Ghana and develop a risk assessment framework, to be used for improving the regulatory guidelines for m-insurance products in Ghana.
Mobile insurance (m-insurance) is an innovative line of insurance products, whereby the mobile networks are used to deliver one or multiple components of insurance for the mass market. In Ghana, m-insurance plays an important role in the microinsurance sector. Approximately 60% of lives (as of 2014) are insured by microinsurance products delivered via mobile insurance. Mobile insurance models could be either strategic (Mobile Network Operator (MNO) ofers insurance under its own branding) or transactional (MNOs provide the platform only for a purely transactional role).
The present study is focused on the analysis and risk assessment of the strategic model for the following reasons:
a. Products via the strategic m-insurance model are economically more significant for the microinsurance sector in Ghana (over 5m GHS in premiums in 20141) than the transactional model.
b. In a strategic model the regulatory factors are more complex, due to the active role played by multiple stakeholders in product development, delivery and maintenance: MNOs, Technical Service Providers (TSPs), and financial institutions. Hence, close collaboration among regulators (insurance, mobile network and banking regulators) is required in order to ensure adequate consumer protection, client value and financial sustainability for the products.
c. In a transactional model, the MNO plays a more passive role in simply providing a platform for diferent insurance processes, such as premium collection and claim payment. Hence, the regulatory environment and regulations developed by the insurance regulator may be sufcient for this model.