National Insurance Commission Insurance Perceptions Index Research

The National Insurance Commission (NIC) was established under the Insurance Act of 1989 (PNDC Act 227) and now operates under ACT 2021 ACT 1061.

The object of the Commission is to provide effective administration, supervision, regulation and control of insurance business in Ghana. Obviously, it’s quite controversial to say that most people view their insurers with ambivalence.

The prevailing perception of insurance companies is that they are much needed but not appreciated, relied upon but not trusted.

As the primary regulatory institution in charge of insurance and related matters in the country, the NIC makes industry-related policy decisions based on research.

In this context, the NIC commissioned the first-ever Public Perception, Awareness and Trust Index in 2019 in collaboration with the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ).

In 2020, the NIC conducted the second round of searches for the same indices to track progress.

The third cycle called phase 3 was conducted in 2021. The phase 3 research cycle forms the basis of the current study in context.

In general, consumer confidence, as measured by the Consumer Confidence Index (CCI), is defined as the degree of optimism about the state of the economy that consumers of services, such as insurance, express through their saving and spending activities. When consumers are confident in their future, they tend to spend money and drive economic growth.

The Phase 3 research cycle is particularly important as the year was marked by the COVID-19 outbreak and subsequent downturn in economic activity.

According to a study conducted by PWC on the effect of COVID-19 on insurance customers, there is a potential influence of COVID-19 on service preferences, loyalty to carriers and attitudes towards auto insurance , home, life, dental and vision, as well as retirement.

In short, financial stress is correlated with dissatisfaction, so insurance companies can draw conclusions from this situation to modify, for example, insurance plans, offer alternative rates and use digital technologies to progress on market, although there is an overall economic downturn due to COVID-19 and other socio-economic stressors.

The current study found that the Knowledge Index is 0.5132, which is lower than the 2020 average Knowledge Index of 0.5392, a change of 2.6%. In addition, men (0.5296) obtained a higher knowledge index than women (0.4874).

The average perception attitude index was determined at 0.5308, about four percentage points lower than the 2020 estimate of 0.5704. In this case, current customers (0.5502) had a more positive view of insurance than previous customers (0.5292) and non-customers (0.5175).

More importantly, the average trust index was 0.5813, which is higher than the 2020 estimate (0.5666) by 1.5 percentage points.

The current client, previous client and non-client were pegged at 0.6367, 0.5596 and 0.5572 respectively. In terms of locality, the index scores were: urban (0.6075), peri-urban (0.5573) and rural (0.5758).

In the midst of a difficult year, the various intentions aimed at improving public perception, awareness and confidence in insurance in Ghana have yielded positive results.

Some of these interventions include insurance awareness and education programs in NIC’s seven regional offices and agency training programs, among others.

The recommendations set out below will support NIC’s ongoing response programs, to build trust, awareness and public confidence in insurance in Ghana post COVID-19.

The specific objectives defined in the Phase 3 research cycle include the following:

  • Assess the general public’s perception and understanding of insurance concepts, products and companies
  • Assess the general public’s knowledge of insurance concepts, products and companies
  • Assess the attitude of the general public towards insurance concepts, products and companies
  • Evaluate the general public’s experiences with inquiries, complaints and dispute resolution
  • Identify issues that need to be addressed to improve public trust

Sample size and geographical distribution

The sample size used for this study was 1613. The quota sampling approach was used to select the different samples by region according to a logical stratification process by ratio or population size of the region.

Similarly, the quota sampling approach was used to stratify the population into urban, peri-urban and rural samples, based on the working population density (18-65) of all 16 regions of Ghana. .

The age range of 18 to 65 years was considered for the study, however, the statistical definition of the working population (15 to 65 years) was used to calculate the sample size. The insured were allocated a quota of 40% of the entire distribution, the former insured were also allocated a quota of 35% and the uninsured were allocated a quota of 25%.

During data collection, the sampling and data collection approach was used to identify potential customers, former customers and non-customers in urban, peri-urban and rural areas purposely selected for the study. .

Once the target locations were determined, the convenience sampling approach was used to select respondents in a convenient face-to-face fashion – and selection was based on respondents who were “at hand” and willing to participate in the study.