The recent appreciation of the Ghanaian cedi against major foreign currencies especially the US dollar is expected to generate a wide range of positive impacts across the economy, and the insurance industry is no exception. This development is poised to benefit both insurers and policyholders by improving cost structures, stimulating demand, and enhancing regulatory oversight.

An anticipated benefit of the cedi’s appreciation is the potential decrease in reinsurance expenses. Reinsurance is the insurance that insurance companies buy to protect themselves from large losses. These reinsurance agreements are often paid in foreign currencies. As the cedi gains value, Ghanaian insurers will find it more cost-effective to purchase reinsurance, especially from international partners, who dominate the market despite the presence of three local reinsurers: Ghana Reinsurance Corporation, Mainstream Re, and GN Reinsurance. This reduction in cost will likely improve insurers’ profitability, enabling them to offer more competitive premiums, reinvest in staff training, and expand operational capabilities.

Another anticipated benefit of the cedi’s appreciation is the lowered cost of importing goods into Ghana, which enables businesses to more affordably acquire equipment, raw materials, and other essential assets. This increased import activity will naturally lead to higher demand for insurance coverage to protect these goods during transit and storage. Under the Insurance Act, 2021 (Act 1061), marine cargo insurance is mandatory for all imported shipments, ensuring that businesses comply with regulatory requirements while mitigating risks. As more companies take advantage of the favorable exchange rate to expand operations through imports, the resulting rise in marine insurance policies is expected to significantly increase premium income for insurers, further fueling growth within the insurance sector.