The demand for micro insurance in Ghana

Oscar Joseph Akotey (Department of Economics and Business Administration, Catholic University College of Ghana, Sunyani, Ghana)
Kofi A. Osei (The Finance Department, University of Ghana Business School, Accra, Ghana)
Albert Gemegah (The Finance Department, University of Ghana Business School, Accra, Ghana)

Journal of Risk Finance

ISSN: 1526-5943

Publication date: 24 May 2011



The purpose of this paper is to identify the factors which influence the demand for micro‐insurance services among the informal sector workers of Ghana who are quite vulnerable to various risks in the economy.


The study adopts a quantitative technique based on primary data sampled randomly from 100 informal sector workers from four major market centers in Accra, Ghana. The probit regression model was used for the empirical investigation.


Empirical investigation using the probit model indicates that premium flexibility, income level and nodal agency are significant determinants of micro‐insurance demand. Insurance knowledge, expectation (trust) and marital status were also found to have positive and significant impact on the demand for micro insurance. Interestingly, the empirical analysis shows that formal education is not a significant determinant; rather one's level of insurance knowledge has a positive and significant impact on micro‐insurance demand.

Social implications

Insurers must consider the nature of the cash‐flow of informal workers in the design of premiums. The government must integrate micro insurance into its poverty reduction program.


The micro‐insurance market is very new and unresearched in Ghana. This foundational study is, therefore, very original and a most valuable guide to commercial insurance companies which want to venture into this huge untapped opportunity in the Ghanaian informal sector.



Akotey, O., Osei, K. and Gemegah, A. (2011), "The demand for micro insurance in Ghana", Journal of Risk Finance, Vol. 12 No. 3, pp. 182-194.

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Copyright © 2011, Emerald Group Publishing Limited

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