EXAMINING THE ROLE OF INSURANCE COMPANIES IN THE ECONOMIC DEVELOPMENT OF GHANA

EXAMINING THE ROLE OF INSURANCE COMPANIES IN THE ECONOMIC DEVELOPMENT OF GHANA

1.2 Background of the Study
Several indicators have shown that, the insurance industry is at the preliminary stage in that there are a lot of
competition and risk. According to Rayness, H.E (1976), we can see that insurance started thousands of years
ago but still it is at the preliminary stage as compared to the banking industry. It appears that people are not patronizing insurance in Africa due to several reasons.
There is not enough education about insurance; people see it as a cheat on the society. Most of the insurance
activities are directed mostly to the monthly income earners and government workers leaving the petty traders
aside.
Although it is by law that every car owner will have at least some sort of insurance cover for the car that is the
third party insurance which seek to provide insurance for the innocent pedestrian and other cars. Even this,
people are running away from it but thank God the law will deal with people who do not have insurance
coverage for their cars.
A whole building will be there without any insurance coverage. People feel reluctant to go for insurance because
when they see the kind of stress people go through before claiming their claims, it does not encourage them to
take insurance policy.
.Insurance plays some vital roles in economic development. Due to the changing needs of the economy of
Ghana, there is the need to ensure that proper education on insurance is taken into consideration; the
Government must also broaden the laws on insurance by adding more to the motor insurance.
This study therefore seeks to find answers to the questions and to assess the role played by the insurance in the
economic development.

1.3 Statement of the problem
In the 21st century, many Countries are moving from entrusting their security with the Banks to the Insurance
companies because of the dynamic and significant role Insurance Companies play in ensuring security in the
development of their economy.
Although these insurance companies have contributed tremendously in the aspect of security to the development
of the Ghanaian economy, and with all the efforts being made in creating awareness, most Ghanaians are still
reluctant to take insurance because they do not see the need for it. The difficulty nature of the insurance industry
towards the payment of claims makes it unattractive for third party insurers (commercial vehicles) to undertake
insurance policy. This has really affected their growth and the roles they play in the development of the
Ghanaian economy, hence the need to carry out a study into the roles insurance play in the contemporary
Ghanaian economy and assess the awareness of insurance among the public.

EXAMINING THE ROLE OF INSURANCE COMPANIES IN THE ECONOMIC DEVELOPMENT OF GHANA