Day Three Accra

Day 3 Accra

Today was really encouraging, even inspiring. We met with people who are doing some tremendous work here in Ghana, and really making a difference in the lives of people here. They all seemed genuinely concerned for helping lift others out of poverty. In general, that seems to be a theme throughout Ghana and perhaps why it is more successful than other countries, they really seem to believe that each person is his brother’s keeper.

Global Mamas
Our first visit was with Executive Director of Women in Progress and Co-Founder of Global Mamas. http://www.globalmamas.org/Global Mamas is a Fair Trade organization established by two former Peace Corps volunteers here in Ghana. They mainly export to the U.S. One of them works here and the other in Minneapolis. They work with hundreds of women locally who make some really beautiful handcraft items. Hope to show you that as I will be travelling to Cape Coast to see them doing Batiks when we visit the slave castles Saturday. They export these goods to 400 organizations in the states . They also have retail location in Accra and Cape Coast but they work with women from all over Ghana. There is model is based on them (personally) providing all the capital upfront for the women. (No success getting grants from the U.S despite years of growing success. They see a need for their women to get financial education especially about savings and insurance, because these women now provide for their families, and extended families, who are highly dependent on their income, they have virtually no life insurance. They would be excellent candidates for microinsurance. They have been doing internships/volunteer experiences for several years. They have a complete framework in place where they employ student interns and volunteers and match them with business opportunities. Two students from Indiana University are working on marketing, and website design for some of the women who supply global mamas with goods. They are working on marketing Fair Trade as the intern/volunteer. They see the potential for a program on financial literacy and insurance being added to their existing lessons they conduct on bookkeeping for the women.


Insurance Commissioner's Office
Next we went to the National Insurance Commissioner’s OfficeWe met with THE actuary for National Insurance Commissioner. (He was formerly an electrical engineer but passed all his actuarial exams self-study here in Ghana in four years. Very impressive person, and there are many like him. Currently all the company actuaries are external. They want to set up an exchange program with us. One student actually is a math major and MBA teaching currently who wants to come to ISU. --Hey, Krzys we need to get SOA or CAS to donate textbooks to for the to study. Currently they have to share them all over. And they have nice facilities where they could run review sessions.)

We learned that there were about 40 insurance companies. Microinsurance has been approved for about four years now. They review the rates and forms and even marketing materials. The fastest growing market is funeral expenses coverage because the cost to host a funeral can cost thousands of dollars. They is very popular but the penetration of life insurance is only 2 to 6 percent (depending on who you ask). Motor insurance is required in Ghana.
Met with researcher there who thought the weather indexed idea was good start. They would like to see it expand to other perils like loss from pests . (They would like a formal MOA to continue discussions and would like us to meet with the insurance commissioner. )

Insurance Company Visits
Next we met with Star Life Insurance Company COO. They have done microinsurance for market vendors for about one year. They have a very interesting sales system. It is sold literally marketplace to street vendors by agents. They advertise by having trucks drive by using megaphones to market vendors. They walk through t he market and collect at the various stalls.

The interesting innovation is that they have partner with a bank to do a mobile bank. These are like portableATM’s where the market women deposit their earnings in mobile bank, and pay their insurance premium at same time. Sells to greater Accra Agents who were collecting the premium are all recent college grads. (One key is to have collection that is somewhat flexible like allowing the women to make payments at different times as long as they make the entire payment within a given time period whether it is collected weekly, even daily). (What might the future hold? Other potential agents besides street market agents, are training people like taxi drivers, dressmakers, and fishermen. People who have a lot of interaction with others.) Again the issue that there is little understanding in population about the value of insurance, especially life insurance was made. One thought is to have the industry join forces through a joint marketing effort. There is already a Ghana Insurance Association and a Life Ins. Association that could be the vehicle for this. Perhaps radio dramas? At any rate he sees consumer education as critical.

Next we met with CEO of GLICO. Glico is top life insurance provider and has been working with Care International on microinsurance for about 5 years. He stopped all meetings and brought in his entire team to meet with us. They are listened to us and expressed some interest in the weather-indexed insurance product idea. We later talked with Cynthia who handled the microinsurance program. One of the people we met had been an Assoc. prof. of economics at Virginia Tech. He moved here 10 years ago, and suggested that we should contact IBIS in Tamale a Dutch NGO. GLICO requested we send them a formal letter outlining how we might work together.

We then met with State Insurance Company Life, the oldest and largest company, and spoke with their Head of Life Marketing. He gave us a lot of information about microinsurance in Ghana. They have offered life insurance to “informal” r underserved, market for about 4 years. They actually send agents into the market and collect DAILY to the plan. The most preferred life product is one that has an investment component to it, because after a period of time the insured can then take use that to take out a small loan against the policy to grow business.
After awhile the insured will then be interested in larger loans. But to take out larger loans SIC partnered with banks. (The challenge is that the traditional banks don’t really want to mess with hassle of smaller accounts.) They collect money in groups of ten. SIC insures the entire group. Premium is collected from group but the claim payment is made to individual member. They work with ACCION, Opportunity International for distribution in order to defray distribution costs. Advertisement is trucks with speakers and next they plan radio ads. He also confirmed that there is very low market penetration and sees the need for industry-wide consumer education. Says Radio ads must be in local languages. Sees potential in a weather-indexed product. Would like to meet again on June 9th.

APEX Bank

Finally we met with Apex , the banking entity that is over all rural banks, and spoke with the Head of Research . They have 600 rural banks. They are also working with concept of microloans to portfolio and using group lending model. They provide education to the rural banks.
They were KEENLY interested in the weather insurance product. They are very excited by this and see this product is potentially very valuable. Protecting against default from the farmers that they make the loans to is something they want to be able to do. In fact they were so interested in the concept, that he had flown to India on World Bank grant and met with people from Malawi to explore crop insurance models. They would like an index for north for too little rain and in the south and north for too much rain. They want to meet with us again before we leave. They see a need for risk mitigation techniques like irrigation more than just insurance. They said Ghana should be doing more grain crops. Said we need to contact SPEED Ghana. SPEED has given loans for rural bank in Tamale. http://www.speedghana.org/index.php?opt=subcontent&Menid=4&Itemid=7
We travel to Kumasi tomorrow to meet at the University of Science and Technology with their department of agriculture. Should have some good photos as we will be travelling by car.Bye,Jim

Off to Kumasi at 5 a.m. then to Cape Coast by night