ICII 2023 in Ghana
A journey into Ghana’s rural microinsurance world

By Renate Bleich

Around 50 participants of the International Conference on Inclusive Insurance 2023 were invited to attend a field trip to gain first-hand knowledge of how rural communities perceive microinsurance and how it can positively affect lives and livelihoods of individuals facing difficult situations. The field trip was organised by VisionFund Ghana (VFG) in partnership with World Vision Ghana and Allianz Ghana, who took us to Swedru and surrounding areas in the Central Region of Ghana, located roughly two hours west of Accra.

VFG works in 16 regions of the country, providing support and microfinance services to people who are financially excluded and have no access to formal banks or insurance. They support communities to set up Savings & Loans Groups. Together with Allianz Ghana they offer a credit life insurance which is linked to all loan products offered by VFG with a premium of 1% of the loan amount. This insurance coverage serves as a safeguard for clients in the event of hospitalization, natural disasters, disabilities, and unfortunate incidents such as the death of the policyholder or beneficiaries.

In addition to the credit life insurance, VFG with Allianz Ghana also offers the Abusua Asomdwe insurance product. This product is specifically designed to address gaps in the National Health Insurance of Ghana. Its purpose is to extend support to individuals and their families residing in rural communities who are not utilizing a loan product from VFG but still require insurance coverage. Besides the policy holder it covers five family members, thereby living up to its name: abusua meaning family and asomdwe meaning peace. This insurance product is extremely affordable, with a premium as low as 60 Ghana Cedis ($5) for the entire year. Its benefits include 2000 Cedis ($168) for death or disability and 100 Cedis ($8.4) per night for hospitalisation. The aim is to ensure that this insurance coverage is accessible to everyone, regardless of their financial means.

In order to keep the process simple and costs low, the use of digital technology is vital. Registration of policy holders is done via app, policy holders pay premiums and receive claims pay outs via mobile money, claims forms can be sent in via WhatsApp. It is important to note that the Abusua Asomdwe product is able to aid the most vulnerable members of society, granting them access to microinsurance that is currently not available to rural communities.

Abusua Asomdwe was piloted in 2021 in the northern part of Ghana and it is now being rolled out in other regions as well. Between April and August 2023 VFG staff of 16 regions were trained who are now in turn giving training sessions on the product in rural communities. We were invited to participate in such an onboarding training session as part of this field trip.

Training session in Ehuntem Community

In Ehuntem community we met with members of two community Savings & Loans Groups. The primary means of sustenance in the community of Ehuntem is centered around farming, specifically cocoa farming and coconut farming. The training session was guided by Oscar, a dedicated officer from VisionFund. A fairly large group had come together in their assembly place. Oscar explained in a very energetic and interactive way the different kinds of benefits of the product in situations like illness or death of a family member or if someone got seriously hurt, leaving them permanently disabled. The session also gave an impression of how insurance is perceived, when members of the group explained their understanding of it: “Insurance is something that is supporting you when you are about to fall” or “Insurance is like a fingernail that you can use to scratch when your body is itching”. Also it showed that hospitalization and managing to pay school fees for the children are amongst their biggest worries.

Building financial resilience

The second half of the field trip was about learning first-hand how insurance can play a vital role in building financial resilience of individuals and families. At the VFG office in Swedru we got to watch testimonial videos of beneficiaries of the Abusua Asomdwe insurance product, residing in the northern region of Ghana. Then our trip took us to villages to meet female beneficiaries of the Credit Life Plan who would share their stories with us. Insurance empowered these local women to cope with situations of personal misfortune such as death of the husband or serious illness. They had received claims pay outs from insurance as death benefits or hospitalization cash benefits and used the money to sustain their livelihoods and provide for their families. They had been able to cover expenses, invest in their small businesses in order to secure their income or pay back debt. 

We met Margaret Ainooson, who owns a bakery in Gomoa Osedze community. She is married and proud mother of two children. She had fallen seriously ill and had required a two-day hospitalization. Because of her insurance, she got a 200 cedi hospitalization cash benefit payout, which helped her and her family to cover costs and provide some stability during her recovery.

Efua Okyerewa of Gomoa Lome community also told us her story. She is a mother of four children under the age of 18 and runs a provision store. Her husband had passed away in 2021 and his illness and funeral expenses had heavily burdened Efua financially. When her husband died, his family threw her out of her home and took possession of her property. The payout of 1400 cedi for funeral expenses, which she received from the insurance, helped her greatly. Besides paying for the funeral she also used this money to find a new home and reopen her provision store.

At a local market we met with Esi Mariama. Esi is a grandmother and responsible for her three grandchildren, all under the age of 18. She runs a fried fish business at a local market for their livelihood. When her husband passed away, she received 1,400 cedi funeral benefit, which she used to cover funeral expenses, pay back some debt and reinvest in her fried fish business. With this support she could continue to provide a living for herself and her grandchildren.

Outlook

The microinsurance program of VFG proves to be successful. Currently around 148,000 lives are covered, mainly by the credit life insurance product. The Abusua Asomdwe product is just starting and after having relied on donor money for the pilot, VFG and Allianz Ghana are now working on making this project sustainable. More ideas are already lined up, for example a microinsurance product covering climate risks, with further development depending on availability of funding.

This field trip was an inspiring experience for all participants, who gained profound insights into implementation of microinsurance for the most vulnerable in rural communities of Ghana. As one participant put it: “This field trip has completely changed my view of microinsurance.”