Enhancing Organizational Perspicacity in the Ghanaian Insurance Industry: Viewpoint of Customers on Sales and Marketing Officers

By Ansah, Martin Owusu; Chinomona, Richard | Journal of Global Business and Technology, Fall 2015 | Go to article overview

Enhancing Organizational Perspicacity in the Ghanaian Insurance Industry: Viewpoint of Customers on Sales and Marketing Officers


Ansah, Martin Owusu, Chinomona, Richard, Journal of Global Business and Technology


INTRODUCTION

Insurance in general plays a vital role in the life of an individual, business settings, as well as government towards the welfare of the entire population of a country, especially in Sub-Saharan Africa where most countries are in their developmental stage. Mina (2007) observed how insurance business is able to help an economy lessen its total risk to the minimum. There have been historic changes in insurance markets around the globe in the last 15 years, as is evident from the United States' passage of the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, the introduction of the Third Generation Insurance Directive in 1994 by the European Union (EU), as well as the launching of the financial system deregulation in

1996 in Japan. In Ghana, the passage of the Insurance Act 724 of 2006 also led to an increase in the number of insurance companies. The general objective of these deregulatory efforts has been the fortification of competition within and across national boundaries, as well as the lowering of prices and the enhancement of product offerings as revealed by Mahlberg and Url (2003).

Apart from the structural changes that have affected the insurance industry, there has also been an improvement in Ghana's Gross Domestic Product (GDP) which rose to a two-decade high of 7.3 per cent in 2008. This was made possible through sound fiscal policies put in place by government, as well as prudent monetary policies pursued by the Central Bank of Ghana to increase the activities of the private sector with regulatory agencies such as the National Insurance Commission (NIC) issuing licenses to a number of foreign insurance companies to compete with their Ghanaian counterparts (International Monetary Fund, 2009). In 2012, the life insurance gross written premiums (GWP) of Ghana's insurance industry stood at GHS 355.8 million, showing a growth of 31.7%, while non-life insurance GWP stood at GHS 494.9 million, also witnessing a growth of 38% from 2011 ( KPMG Ghana Limited, 2014).

Conversely, how the growth rate shows a relationship with customer or client satisfaction in the insurance industry, is an issue that ought to be researched. The regulatory policies, the sound economic policies as well as the perceived image of Ghana all contribute to Ghana being regarded as one of the more stabilised countries in Sub-Saharan Africa which has brought competition into the industry, and made it imperative for insurance companies to be desirous in surviving in a hostile insurance environment. The significance of the insurance industry to the economy of Ghana can never be underestimated, looking at statistics from research that was conducted by KPMG Ghana Limited in July, 2014 on the review of the Ghanaian insurance industry. It was revealed from the study that insurance and financial activities confirmed an average growth rate of 4.8% from 2009 to 2013. In 2013, it accounted for 6% of Ghana's Gross Domestic Product (GDP) .The activities of insurance and financial sectors form a core constituent of the services sector and has been growing over the last few years. From 8.8% of Services GDP in 2009, financial and insurance activities increased to 13.2% of Services GDP in 2013. The financial and insurance sector has been growing consistently since 2009. From GH¢1.5 billion in 2009, it grew by 45% in 2010. After 10% growth in 2011, it further posted strong growths of 40% and 72% in 2012 and 2013 respectively. The statistics have shown that research on Ghana insurance activities is not an option, but a necessity towards the growth of Ghana's economy.

On the other hand, the understanding of insurance activities in Africa and specifically Ghana is a complex one because of the perceived misapprehension between insurance companies and the general public. There however seems to be growth in the industry, subject to available statistics. An article that was published on the Ghana Business News website titled, "Ghana's Public Confidence in Insurance Dips", was part of a series of papers presented at a public lecture to mark Insurance Awareness Month in the Volta Region at Ho, Ghana. …

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