Insurance companies can incentivize good driving in Ghana as YAFO begins policy conversation on vehicle insurance

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Growth is a function of action. Without effort, which entails labour, neither physical nor intellectual progress can occur.

The Young Africans for Opportunities (YAFO) strongly identify with this Calvin Coolidge quotation because it emphasizes the organization’s primary purpose of empowering young to build thriving societies. YAFO has put in a lot of effort over the years, working nonstop to offer significant contributions to economic and social challenges.

From planning youth seminars with plenty of opportunities to voicing objections to government regulations and issues relating to growth, particularly those that have an impact on entrepreneurs, students, and young professionals.

It is not surprising that the organization identified a hole in the country’s vehicle insurance program and is prepared to investigate the issue in order to offer potential remedies and remove obstacles to innovations.

The organization was interested in vehicle insurance activities in Ghana as early as the beginning of 2022. This culminated in the “Driver Mo” initiative, which included preliminary research and surveying all sixteen areas around the country to learn about various aspects of vehicle insurance policies.

This included determining the typical driver’s grasp of insurance, determining driver knowledge on claim process, and uncovering a variety of vehicle insurance-related difficulties that drivers and vehicle owners face.

These conclusions, however, did not bring the chapter to a close; a sequel to the study was the last stage in which YAFO convened stakeholder s engagement meeting on the vehicle insurance experiences in Ghana.

The event, which took place on October 25th, 2022 at the African Reagent Hotel, was an attempt on the part of the organization to bring on board various stakeholders of Ghana’s vehicle insurance sector in order to engage their views and suggestions and to come up with possible recommendations to address the challenges revealed by the research on vehicle insurance experience in Ghana.

The presentation of summary findings from Driver Mo – exploratory research on vehicle insurance in Ghana by Nathaniel Dwamena, co-founder and Programs Manager of YAFO, was a highlight of the event.

The presentation highlighted numerous critical and undeniable aspects affecting the efficacy of vehicle insurance in Ghana. Statistics ranging from the percentage of accidents that are not reported to insurance companies to the number of drivers who purchase insurance to avoid police harassment.

According to the Driver Mo report, most drivers choose third-party insurance over comprehensive insurance because they perceive no benefit in having insurance other than as a formality. These and other important discoveries were made as a result of the exploratory research across the 16 regions of Ghana.

The event would not have been a success if a key aspect of stakeholder interaction had not been there. Mr. Richard Nii Armah, Private Legal Practitioner and Insurance Analyst, Mr. Alexander Osei Mensah, General Manager for Holland Insurance, and Mr. Don Dela, Safety Analyst launched themselves into an intensive conversation scrutinizing seriously the numerous revelations the research presented.

The discourse centered on a number of perplexing issues posed to the panel on the different gaps in vehicle insurance coverage discovered by the research. The panel discussed the nature of insurance regulations in the Ghana and how such regulations influence response to clients’ need by vehicle insurance companies.

After critically evaluating, the stakeholders agreed that, while insurance regulations are generally favorable to insurance companies, the National Insurance Commission and insurance companies needed to do more to provide better and innovative services in response to the needs of the average driver/vehicle owner.

In addition, the topic shifted to the function of insurance plans in encouraging safe driving on our roadways. It was discovered that insurance had replaced what would be called tortious obligation to others, in this case, the driver’s responsibility to ensure that their acts and inactions do not endanger other road users.

Insurance is unlikely to be a factor of good driving behavior in a situation where insurance is purchased at a fixed rate for all drivers, as is the case in Ghana. In contrast, in other countries, vehicle insurance is based on an individual profile rather than a fixed fee. A driver’s insurance premium is determined by the individual’s profile.

Furthermore, stakeholders discussed the bureaucratic processes involved in obtaining insurance claims, the police attitude towards providing police reports required to confirm insurance claims, and the possibilities of expediting claim procedures.

Before the event concluded, a few people in attendance asked the stakeholders questions about some of the topics they had covered as recommendations and possible solutions to Ghana’s vehicle insurance challenge.

This is where the panel examined the problem of insurance firms promoting excellent driving behavior by offering monetary awards or maybe granting insurance premium discounts.

Stakeholders highlighted why, although being tried, this policy has proven ineffective due to inflation hurting insurance businesses, forcing them to be cash-strapped and, in the long run, causing some companies to fail. Instead, insurance companies have concentrated on dramatically boosting financial coverage in the event of a casualty.

The panel concluded that concentrating more on individual drivers’ safety measures, and behavioral patterns as a consideration in determining insurance coverage might lead to drivers/vehicle owners placing a higher value on vehicle insurance.

In a nutshell, the vehicle insurance stakeholders meeting was insightful and yielded positive outcomes. YAFO is certain that this event, and the transformative dialogue will act as a catalyst for the much-needed reform in Ghana’s vehicle insurance market.

By:Benedicta Nelmon

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