Profitability within Ghana’s insurance industry remained robust in 2024.
According to the 2024 Financial Stability Review, this was largely supported by stronger investment income, improved underwriting performance, particularly in the non-life segment and insurers’ adaptability in managing investment portfolios post Domestic Debt Exchange Programme.
Across both segments, the profit outturn was a positive signal for financial stability. This would potentially support capital retention and organic growth, reducing immediate pressures for recapitalisation.
The report pointed out that despite improvements in profitability, segment-specific risks remained.
In the life insurance segment, investment income continued to play a crucial stabilising role, complementing underwriting profits and enhancing overall financial performance.
Such dependence, the report said, underscored potential vulnerabilities to future macroeconomic shocks, reinforcing the need for life insurers to sustain and further strengthen underwriting profitability.
In the non-life segment, profitability was driven by both underwriting profits and investment gains, demonstrating a relatively healthier earnings structure.
Diversified Profitability Enhances Resilience
This diversified profitability base enhances resilience, making non-life insurers better positioned to withstand external shocks while maintaining capital strength. However, the non-life segment’s reliance on reinsurance for risk transfer implies that a portion of future profitability will be sensitive to global reinsurance pricing cycles.
For the NIC, these profitability trends emphasise the importance of supervision.
The report added that the supervisory framework focuses on sustainable earnings quality, ensuring that profitability is derived from sound underwriting, prudent pricing, and effective cost management, rather than over-reliance on volatile investment returns.
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