Reinsurance in Ghana: Navigating a Shifting Landscape and Persistent Challenges

Reinsurance—often referred to as “the insurer’s insurance”—is the quiet backbone of every resilient insurance market. It allows primary insurers to transfer portions of their risk portfolios to reinsurers, thus stabilizing their balance sheets and ensuring that catastrophic claims do not cripple their operations. In Ghana, the reinsurance sector has evolved steadily over the past few decades, reflecting both opportunities and enduring challenges within the broader insurance ecosystem.

A Growing Market Amid Structural Imbalances

Ghana’s insurance industry has expanded significantly over the past decade, buoyed by regulatory reforms, increased public awareness, and a rapidly growing middle class. According to the National Insurance Commission (NIC), total gross written premiums grew by over 20% annually between 2019 and 2023, reflecting both sector confidence and rising demand for insurance products.

This growth has naturally amplified the need for robust reinsurance support. As insurers underwrite larger and more complex risks—particularly in sectors such as oil and gas, construction, and logistics—their dependence on reinsurance becomes indispensable. However, the reinsurance market in Ghana faces deep-seated structural constraints that must be addressed if the industry is to achieve self-sufficiency and resilience.

1. Heavy Dependence on Foreign Reinsurers

One of the most pressing challenges is the over-reliance on foreign reinsurance markets—mainly from Europe, South Africa, and Asia. While international reinsurers provide valuable capacity and technical know-how, this dependence exposes Ghanaian insurers to foreign exchange volatility and capital flight.

“The volatility of the cedi against major international currencies is a constant headache for local insurers heavily reliant on foreign reinsurance treaties,”
remarks Dr. Kofi Mensah, a senior lecturer in Actuarial Science at the University of Ghana.
“It introduces an element of unpredictability that can undermine even the most meticulously planned financial strategies.”

Indeed, as reinsurance premiums are typically denominated in U.S. dollars or euros, sudden depreciation of the Ghanaian cedi can inflate costs and impair profitability. This has been particularly evident during periods of macroeconomic instability, when exchange rate losses erode underwriting gains.

Furthermore, the continuous outflow of premium income abroad weakens local capital formation. Developing stronger domestic and regional reinsurance capacity is thus essential not only for financial independence but also for retaining value within Ghana’s economy.

2. Building Local Reinsurance Capacity: Gains and Gaps

The establishment of Ghana Reinsurance Company (Ghana Re), one of West Africa’s oldest reinsurers, and the later introduction of Mainstream Re and Donewell Re, are commendable steps toward localization. These institutions have contributed immensely to market stability, providing technical support and absorbing domestic risks.

However, their capacity limits often fall short of the growing market demand—especially for large industrial, marine, and energy risks. As a result, local companies still rely heavily on international reinsurance partners for treaty and facultative placements.

“Ghana Re and other local reinsurers have demonstrated resilience, but their balance sheets are not yet deep enough to absorb high-value or catastrophe-prone risks,”
explains John Ofori, an insurance consultant and former CEO of a top brokerage firm.
“Expanding local capacity through capital injections, regional pooling, and strategic partnerships is key to reducing dependence.”

A promising approach could be enhanced collaboration across the ECOWAS region, leveraging shared risk pools and cross-border treaties to build a more resilient African reinsurance architecture.

3. Data Deficiency and Pricing Challenges

Reliable actuarial and market data remain the cornerstone of sound reinsurance underwriting. Yet, in Ghana, data fragmentation and limited analytics capacity persist. Inconsistent claims records, incomplete policy information, and poor loss-tracking systems make it difficult for reinsurers—especially those abroad—to price risks accurately.

“Without robust data, reinsurers are essentially flying blind to a certain extent,”
notes Ama Owusu, a risk analyst at an Accra-based composite insurer.
“This translates into a higher risk perception, which is ultimately factored into the pricing, making reinsurance more expensive for local companies.”

The NIC’s push for digitization and centralized data reporting under the Insurance Act, 2021 (Act 1061) is a step in the right direction. However, implementation has been gradual. The success of these reforms will depend on consistent data submission by insurers and stronger regulatory enforcement.

4. Regulatory and Supervisory Dynamics

Ghana’s insurance regulator, the National Insurance Commission (NIC), has been proactive in recent years—tightening capital requirements, encouraging mergers, and improving solvency reporting. The introduction of Risk-Based Supervision (RBS) and ongoing alignment with IAIS (International Association of Insurance Supervisors) standards reflect the regulator’s commitment to global best practices.

Nevertheless, some industry stakeholders point to inconsistencies in policy interpretation and enforcement that can create uncertainty.

“A stable and predictable regulatory environment is paramount for attracting long-term investment in the reinsurance sector,”
says John Ofori.
“Any ambiguity or inconsistency can deter potential partners and hinder market development.”

The NIC’s recent Directive on Mandatory Cession—requiring insurers to place a percentage of reinsurance business with local reinsurers before going abroad—has been met with cautious optimism. While it promotes local retention, insurers emphasize that capacity and expertise must first match the obligations imposed.

5. Human Capital and Technical Expertise

Reinsurance is inherently technical. It demands actuaries, underwriters, and claims specialists who understand probability modeling, catastrophe exposure, and treaty negotiations. Unfortunately, Ghana faces a skills deficit in these specialized areas.

“The local market has competent professionals, but few possess advanced reinsurance analytics and modeling capabilities,”
observes Dr. Josephine Asare, a fellow of the Chartered Insurance Institute of Ghana (CIIG).
“We need more structured training, mentorship, and exchange programs with established reinsurers abroad.”

Encouragingly, institutions such as Ghana Insurance College (GIC) and NIC’s capacity development programs are addressing this gap through professional certification and regional collaboration.

6. The Way Forward: A Strategic Roadmap

To ensure long-term resilience, Ghana’s reinsurance ecosystem must prioritize:

• Enhancing local capital and capacity through consolidation and public-private partnerships.
• Improving data systems and adopting digital reporting tools to support actuarial precision.
• Strengthening regional cooperation, especially within ECOWAS and the African Continental Free Trade Area (AfCFTA).
• Developing technical expertise through specialized education and professional training.
• Maintaining regulatory clarity and consistency to attract sustainable foreign partnerships.

If executed strategically, these reforms could transform Ghana into a reinsurance hub for West Africa, mirroring the success of Mauritius and Kenya in their respective regions.

Conclusion

Reinsurance is not merely a back-office financial arrangement—it is the shock absorber that determines the stability of an entire insurance ecosystem. As Ghana’s economy diversifies and risks evolve, the reinsurance industry must evolve with it. Strengthening domestic capacity, data systems, and human expertise will not only safeguard the sector but also advance Ghana’s ambition of becoming a financial services powerhouse in West Africa.

References

• National Insurance Commission (NIC) Annual Report, 2023.
• Ghana Insurance Market Report, 2024 — Deloitte West Africa.
• Interviews with insurance professionals and academics (Dr. Kofi Mensah, Dr. Josephine Asare, John Ofori, Ama Owusu).
• Insurance Act, 2021 (Act 1061), Republic of Ghana.
• Ghana Reinsurance Company Ltd. — Corporate Reports (2022–2024).