Initial Market Assessment

Donors could assist in clarifying the
role, building the capacity, and potentially helping to
secure funding of key disaster risk management organizations
in Ghana. Engagement in Ghana to develop private sector
property catastrophe risk and agriculture insurance should
be seen as a medium term engagement. Banking penetration is
low, as is insurance and micro-insurance penetration, even
when compared to regional countries. That said, Ghana has
seen rapid growth in the micro-insurance market with the
number of people covered doubling in the last 3 years. The
insurance industry, while competitive, has struggled in
recent years with profitability, indicating there could be
need for insurance capacity building and improved
governance. There may be however opportunities for targeted
investments in the northern part of the country more prone
to drought, aimed at increasing disaster resilience among
vulnerable population using market-mediated solutions. Links
could be explored between social welfare programs and
market-mediated insurance solutions. For example, the
government plans to expand the coverage of the Livelihood
Empowerment against Poverty Program (LEAP) by over ten-fold
in the next three years. These mechanisms could scale up
programs against post flood events or drought events in the
north. Donors could support the integration of
market-mediated insurance solutions within the social
welfare programs. Using local insurance capacity to bear
some of the risk and develop the insurance products could
also be investigated. Such mechanisms delivered through
social welfare programs will create a critical mass of
policyholders, which could spur the development of
commercial agriculture insurance.