Ghana’s insurance sector has integrated mobile money into its offerings, making it possible for people to insure themselves as part of everyday financial transactions. This innovation is particularly significant in a country where mobile money plays a vital role in driving financial inclusion.
However, the adoption of mobile money-linked insurance products has faced setbacks, largely due to the introduction of the E-Levy. Solomon Lartey, President of the Chartered Institute of Insurance, discussed these dynamics in an interview with The High Street Journal.
The partnership between mobile money providers and insurers was initially a game-changer, allowing users to indirectly insure themselves as they transact. This model helped extend insurance coverage to many people who were previously underserved.
However, the rollout of the E-Levy, which added additional charges to mobile money transactions, dampened enthusiasm for this product. “When the charges started competing with insurance, activity in this space slowed down tremendously,” Lartey explained.
Despite this challenge, mobile money remains an essential tool for insurance companies to reach new customers. Lartey noted that insurers continue to explore ways to maximize the potential of mobile money platforms, recognizing the unique opportunity they present in extending insurance to previously untapped markets.
Looking ahead, the possible removal or adjustment of the E-Levy could revive this innovation, making it more attractive for both consumers and insurers. However, Lartey cautioned that the removal of the E-Levy should not create a financial vacuum.
He explained that for accounting purposes, any revenue loss from the levy must be accounted for, and alternative measures should be introduced to maintain financial stability. Without this, businesses, including insurance companies, could face challenges in sustaining operations.
The integration of mobile money with insurance not only simplifies the process but also aligns with the broader goal of financial inclusion.
