By Toma Imirhe
The torrential rains that swept across large parts of southern Ghana on Monday, June 29 and the morning of Tuesday, June 30 will inevitably trigger one of the busiest claims periods for Ghana’s non-life insurance industry this year. Flooding across parts of Accra and several other parts of southern Ghana disrupted businesses, submerged vehicles and homes, while a major fire outbreak at Odawna, in the central part of the country’s capital reportedly became more difficult to contain because floodwaters delayed the arrival of firefighters. Authorities urged residents to remain indoors while many public institutions suspended or adjusted operations because of the flooding.
Although it is still too early to estimate the financial cost to insurers, the infamous June 3, 2015 floods in Accra provide a rough indication. Insurance companies operating in Ghana disbursed more than GHc235 million (over US$60 million at the 2015 exchange rate) in claims to victims and affected businesses following the devastating and explosive “June 3” twin flood and fire disaster in Accra. At current exchange rates this could translate to about GHc675 million. Although the catastrophic type of GOIL petrol station explosion and consequent fire has not been replicated this time around, the floods themselves are far more nationwide than what happened 11 years ago.
Meanwhile industry practitioners expect the immediate focus to shift from emergency response to claims notification, loss assessment and settlement. For insurance companies, the coming days will test both the adequacy of underwriting and the efficiency of claims management systems.
The principal insurance products that respond to heavy rainfall and flooding in Ghana are commercial and domestic property insurance, industrial all-risk policies, motor comprehensive insurance (where flood damage is covered), engineering insurance, contractors’ all-risk policies and business interruption insurance where purchased as an extension to property cover. Fire insurance policies are also relevant because many commercial property policies combine protection against fire with additional perils such as storms, floods and other natural hazards through extensions purchased by policyholders.
Although most of the micro-sized businesses such as informal retail sales enterprises rarely take up insurance cover – indeed, many of them are now looking up to government to provide them with financial support – formal business ventures do and their patronage of asset insurance has increased significantly over the past decade because of the repeated incidence of flooding due to Ghana’s notoriously ineffective drainage system.
The typical clients for these products include banks, manufacturing companies, shopping malls, hotels, office complexes, warehouses, schools, hospitals, supermarkets, fuel stations, telecommunications companies, logistics operators and medium-to-large retail businesses. Increasingly, high-income homeowners in flood-prone urban areas also purchase comprehensive household insurance that includes flood protection, while owners of newer vehicles frequently buy comprehensive motor insurance that covers flood damage, subject to policy terms and exclusions.
Ironically, heavy rains often generate both flood and fire claims simultaneously. Floodwaters may damage electrical installations, transformers and generators, while water intrusion can trigger short circuits that ignite fires after electricity is restored. Monday’s fire at Odawna, which reportedly spread while emergency responders struggled to reach the scene because surrounding roads were inundated, illustrates how one natural hazard can compound another.
Industry observers expect insurers to receive claims across several categories over the coming week. Motor claims are likely to feature prominently as vehicles submerged in floodwaters suffer engine damage, electrical failures and interior destruction. Commercial property claims may involve damaged inventory, office equipment, machinery and finished goods, particularly for businesses operating in low-lying industrial and commercial districts. Residential claims could include damage to buildings, furniture, household appliances and personal effects.
However, not every flood victim will receive insurance compensation. Claims will depend on the precise wording of each policy. Some basic fire policies do not automatically include flood cover unless specifically added. Similarly, comprehensive motor policies generally provide broader protection than third-party insurance, which offers no compensation for damage to the insured vehicle itself. Deductibles, exclusions relating to negligence and requirements for reasonable care may also influence claim outcomes.
Insurance professionals have consistently advised policyholders to understand exactly what their policies cover before disasters occur. Executives of the Ghana Insurers Association have repeatedly encouraged households and businesses to review their insurance programmes annually, particularly as climate-related weather events become more frequent.
Over the next several days, insurers will begin activating catastrophe-response procedures. Most companies will establish dedicated claims desks, extend customer service hours and deploy loss adjusters to affected areas. Policyholders will be encouraged to notify insurers immediately, photograph damaged property before commencing major clean-up activities where safe to do so, compile inventories of damaged assets and retain purchase receipts or other proof of ownership whenever available.
Loss adjusters will then verify the cause and extent of damage, distinguish insured losses from uninsured losses and estimate repair or replacement costs. In more complex commercial cases involving factories or large warehouses, forensic engineers and specialist surveyors may also participate in determining the extent of structural damage and business interruption losses.
According to insurance experts, rapid reporting benefits both insurers and clients. Early notification allows adjusters to inspect damaged property before evidence deteriorates, reducing disputes over causation while enabling faster settlement of legitimate claims. Digital claims platforms, mobile applications and electronic document submission are also expected to accelerate processing compared with previous years.
For insurers themselves, June 29 – 30 will provide another measure of how climate change is reshaping underwriting risk in Ghana. The increasing frequency of intense rainfall events is already prompting insurers and reinsurers worldwide to reassess pricing, flood-zone mapping and catastrophe exposure. Ghana is beginning to experience similar pressures, with experts arguing that improved meteorological data, flood modelling and disaster-risk financing mechanisms will become increasingly important in sustaining affordable insurance protection.
Ultimately, the success of the insurance industry’s response will not be judged solely by the value of claims paid but by the speed, transparency and fairness with which legitimate claims are processed. Businesses and households that invested in comprehensive protection against flood and fire will now expect insurers to demonstrate the value of that investment through efficient claims handling. At the same time, the widespread disruption caused by Monday and Tuesday’s rains may encourage many uninsured businesses and homeowners to reconsider their exposure to climate-related risks and strengthen their insurance protection before the next major rainy season event.
