Ghana’s mobile money infrastructure could provide insurers with a commercially viable route to reach informal-sector workers, as new survey findings point to strong consumer preference for digital channels in accessing microinsurance.
The findings from the National Insurance Commission (NIC) and Youth Employment Agency (YEA) Graduate Programme on Insurance Awareness and Risk Perception show that 61.4% of respondents prefer mobile phones and mobile money as a channel for accessing microinsurance, ahead of insurance agents at 48.4%.
The results point to an opportunity for insurers to use existing digital payment networks to reach traders, drivers, artisans and other self-employed workers who may find conventional insurance distribution less convenient.
For the insurance industry, the opportunity extends beyond selling policies through mobile phones. It is about reducing the cost of reaching customers, collecting premiums more conveniently and building a market among workers whose incomes are often irregular and whose businesses remain exposed to financial shocks.
The findings also suggest that distribution will be central to determining whether microinsurance can become a sustainable business line rather than remain a product with limited reach.
Digital payments could lower barriers to insurance
Traditional insurance distribution often depends on agents, physical offices and customer engagement processes that can make small-value policies expensive to sell and administer.
Mobile money could help address some of these challenges by providing an existing channel through which customers can make payments without necessarily travelling to an insurance office.
For workers who earn daily or weekly income, the ability to pay premiums in smaller amounts could also make insurance more compatible with their cash-flow patterns, provided insurers design suitable payment arrangements.
The commercial attraction for insurers is the possibility of reaching more customers without expanding physical distribution networks at the same pace.
However, the survey establishes a preference for mobile channels, not proof that digital distribution will automatically reduce operating costs or increase policy purchases. Those benefits would depend on transaction charges, technology costs, customer acquisition expenses and the design of the insurance products.
The business case will therefore rest on whether insurers can deliver affordable coverage while keeping the cost of acquiring and servicing customers low enough to sustain the products.
Informal businesses offer a market for risk protection
The survey’s risk-perception findings provide a further reason for insurers to examine the informal economy.
Fire was identified by 41% of respondents as a major risk, followed by theft and robbery at 36%, while sickness accounted for 34%.
For informal businesses, such risks can have consequences beyond the immediate cost of damage or treatment. A trader who loses stock may struggle to replenish inventory, while an artisan whose equipment is stolen could lose the capacity to earn an income. Illness can also interrupt daily earnings when a worker has limited financial reserves.
These losses can weaken working capital, disrupt household spending and push business owners towards borrowing or relying on informal support networks.
Microinsurance products designed around clearly defined risks could provide a mechanism for managing some of these shocks. Mobile money could make such products easier to access and pay for, but their value would ultimately depend on adequate coverage, transparent exclusions and reliable claims settlement.
For insurers, this presents a potential opportunity to develop products around the actual risks faced by occupational groups rather than rely exclusively on standardised offerings that may not reflect their circumstances.
The survey findings, however, do not quantify the financial losses suffered by affected businesses or establish how many respondents currently lack insurance.
Affordability will determine whether interest becomes demand
The survey places the national median willingness to pay for microinsurance at GH¢20 per week, with a broader indicated range of GH¢10 to GH¢50.
That finding offers insurers an initial indication of the price points respondents may consider acceptable. It also raises a central commercial question: what level of protection can insurers provide at premiums that customers are prepared to pay?
A low premium may attract customers, but it must still support the cost of providing coverage, administering policies, managing claims and maintaining distribution systems.
Conversely, products priced beyond the reach of target customers could undermine uptake, even where the perceived risks are substantial.
Insurers may therefore need to differentiate products by benefit levels, payment frequency and occupational needs while ensuring that customers understand what each policy covers.
The GH¢20 median should not be interpreted as evidence that every respondent can consistently afford that amount. Willingness to pay does not necessarily translate into actual purchases or sustained premium payments, particularly among workers whose earnings fluctuate.
The commercial challenge is to develop products that balance affordability with meaningful protection and financial sustainability.
Human support remains important in a digital market
Although mobile phones and mobile money recorded the highest preference, insurance agents ranked second at 48.4%. Rural banks and microfinance institutions accounted for 15.4%, while employer-based and group schemes accounted for 14.2%.
The figures suggest that digital channels may need to complement rather than entirely replace traditional forms of customer engagement.
Insurance products can involve exclusions, waiting periods, eligibility conditions and claims requirements that customers need to understand before making payments. An accessible digital platform will have limited value if customers do not understand their coverage or lose confidence when seeking compensation.
A combined model could allow customers to register and pay through digital channels while retaining access to agents who explain products and support claims processes.
For insurers and mobile money operators, partnerships could also create opportunities to share distribution capabilities. However, the commercial terms, responsibilities for customer service and treatment of personal data would need to be clearly established.
From digital reach to a viable insurance market
The findings point to a potential meeting point between Ghana’s digital payment infrastructure and the need for greater financial protection among informal-sector workers.
Yet the next stage will require more than making insurance available on a mobile phone. Insurers must demonstrate that customers can obtain relevant coverage at affordable prices, understand their obligations and receive valid claims promptly.
The industry will also need to establish whether the interest recorded in the survey translates into policy ownership, renewal rates and a sustainable flow of premiums.
For policymakers and industry operators, the findings provide a basis for examining how digital distribution, product design and consumer education can work together to broaden insurance access.
Ultimately, mobile money’s significance for Ghana’s insurance industry will depend not simply on how many people can access a policy digitally, but on how many can afford to maintain coverage and rely on it when financial shocks occur.
