Insurance refers to a form of risk management where an individual or organization acquires protection for unpredicted loss or accident and sequentially reduce the impact of the loss. The loss may or may not be monetary, but it is reducible to financial terms, and usually involves something in which the insured has an insurable interest established by ownership, possession, or pre-existing relationship.
In Ghana, the first Insurance Company was established under the colonial government in 1924. The Insurance industry has gone through enormous evolution and developed in many ways to satisfy clients since its introduction in Ghana 95 years ago.
A major landmark in the evolution of insurance companies in Ghana took place in 1976 when Reinsurance companies were introduced to cover business risks undertaken by the insurance companies in the country. This was to ensure that clients or the insured could rely on insurance companies.
The Bank of Ghana put measures in place to promote insurance by carrying out sensitization programs to emphasize the need for business operators to insure their businesses. This became necessary because the country’s economy was growing and the risks associated with businesses was also on the rise. Therefore, the need to avert total loss in case of an accident or a financial loss and ensure that businesses are secured.
The advent of Insurance companies has not only benefited stakeholders but also provided risk control programs to enlighten their insured on efficient risk management and has contributed significantly to the Gross Domestic Product (GDP) to the country.
The National Insurance Commission (NIC) was established in 1989 under the Insurance Law 1989 (PNDC Law 227) as the regulatory body of insurance companies in Ghana. Currently, it operates under Insurance Act, 2006.
Insurance companies in Ghana have been categorized into three. They are; Life Insurance, Non-Life Insurance and Composite Insurance (a combination of Life and Non-Life insurance).