A GNA Feature by DCOP (Rtd) David Senanu Eklu
Accra, July 4, GNA – Every rainy season in Ghana follows a familiar pattern. Heavy rains flood communities, fires destroy homes and businesses, and families suddenly find themselves facing enormous losses.
The news headlines are often followed by appeals for assistance. Victims call on government, charitable organisations, religious bodies and well-meaning citizens for support as they struggle to rebuild their lives.
While such assistance is important, a critical question remains: Should our national disaster management strategy continue to focus primarily on relief after disasters occur, or should we begin building stronger systems that help communities recover more quickly and become more resilient?
Recent discussions in a United Nations Development Programme (UNDP) Ghana analysis, titled Accra Under Water Again (UNDP Ghana, 2026, June 8), point to an innovative approach that deserves serious consideration: Parametric Insurance.
What is Parametric Insurance?
Parametric insurance, also known as index-based insurance, is designed to provide rapid financial support when a predefined event or parameter is triggered, such as an earthquake, hurricane, flood, or extreme rainfall.
Unlike traditional indemnity insurance, which reimburses the insured based on assessed losses, parametric insurance pays out based on the occurrence and intensity of the event itself, measured against an objective index or threshold. For example, a policy might pay a set amount if a hurricane of category 4 or higher passes within a defined area.
The concept may sound technical, but the principle is straightforward. Unlike conventional insurance, which often requires lengthy assessments and verification processes before claims are paid, parametric insurance releases predetermined payments automatically when specific disaster thresholds are reached.
These thresholds may be linked to rainfall levels, flooding indicators, drought conditions, or other measurable events.
In practical terms, this means that when a major flood occurs, affected communities, businesses, or households could receive support much faster than is currently possible under many traditional relief arrangements.
An idea worth exploring
Every year, disasters impose significant economic and social costs on Ghanaian families. Market traders lose stock to fire outbreaks. Flood victims lose household belongings accumulated over many years. Small businesses suspend operations, while schoolchildren lose educational materials and families face sudden expenses while trying to restore some level of normalcy.
In some cases, emergency relief eventually arrives, but often only after victims have already exhausted savings, borrowed money, or endured substantial hardship.
Parametric insurance offers a potential mechanism for reducing this vulnerability. It can provide predictable and timely financial support, allowing affected persons to begin recovery more quickly.
It can also reduce pressure on government emergency funds and enable more structured disaster financing arrangements.
Importantly, this discussion should not be limited to flooding alone
Ghana faces multiple recurring risks, including urban flooding, market fires, storms, droughts, coastal erosion, and other climate-related hazards. As these risks increase, there is a growing need to strengthen the country’s overall resilience architecture.
This is where the conversation must move beyond disaster relief.
Relief focuses on what happens after a disaster. Resilience focuses on what happens before, during, and after a disaster.
A resilient society is one that anticipates risk, prepares for emergencies, reduces vulnerabilities, and recovers quickly when adversity occurs.
Insurance can contribute to resilience, but it is only one part of the equation, bringing to the fore the importance of caution.
The introduction of any disaster insurance mechanism should never weaken Ghana’s commitment to prevention.
There is a risk that some may wrongly conclude that if compensation is available after a disaster, there is less need to invest in risk reduction. Such thinking would be dangerous.
No insurance payment can replace a life lost in a flood.
No compensation can erase the trauma experienced by a family displaced by fire.
No financial settlement can fully restore the emotional and social consequences of preventable disasters.
For this reason, prevention must remain the first line of defence.
Citizens must continue to avoid building on waterways. Communities must keep drains free from waste. Businesses must comply with fire safety requirements. Local authorities must enforce planning regulations. Educational institutions must strengthen safety-awareness programmes. Emergency agencies must continue public education campaigns and preparedness exercises.
In fact, a well-designed parametric insurance system should reinforce preventive behaviour rather than undermine it.
One option worth exploring is linking insurance participation to compliance with basic risk-reduction measures. Communities that maintain drainage systems, businesses that meet fire-safety standards, and institutions that implement emergency preparedness plans could receive incentives or preferential coverage arrangements. Such an approach would align financial protection with responsible behaviour.
This creates a powerful partnership between prevention and resilience.
The Role of the Private Insurance Sector
The private insurance sector also has an important role to play. Ghana’s insurance industry has an opportunity to work with government, development partners, local authorities, and disaster-management institutions to design innovative products suited to the realities of Ghanaian communities.
The National Insurance Commission (NIC), insurance companies, National Disaster Management Organisation (NADMO), local government authorities, and development partners could collectively explore pilot programmes targeting flood-prone and disaster-vulnerable communities.
The objective should not be to create dependence; it should be to create resilience
As recent floods and fire outbreaks have demonstrated, disaster risks are becoming increasingly complex. The old model of waiting for disaster to occur and then mobilising relief may no longer be sufficient.
Ghana must continue strengthening emergency-response capabilities. The country must continue investing in prevention and explore innovative financing mechanisms that enable faster recovery and greater resilience.
The question is no longer whether disasters will occur. The question is whether the country is building systems capable of helping citizens withstand them and recover with dignity.
A Call for a National Dialogue on Disaster Resilience Financing
The discussion on parametric insurance should not remain confined to policy papers and technical circles. It deserves broader national attention.
Recent floods, market fires, and other disasters have highlighted the need for Ghana to explore more sustainable approaches to disaster-risk financing. This calls for a structured national dialogue involving key stakeholders, including the National Insurance Commission, the Ghana Insurers Association, NADMO, the Ministry of Finance, the Ministry of Local Government, Chieftaincy and Religious Affairs, Metropolitan, Municipal and District Assemblies, development partners, academia, and civil society organisations.
Such a dialogue should examine the feasibility of developing a Ghana-specific disaster-resilience financing framework that combines prevention, preparedness, emergency response, and recovery. It should explore how innovative mechanisms such as parametric insurance can complement existing disaster-management arrangements while ensuring that vulnerable communities are not left behind.
The discussion should also consider pilot programmes in flood-prone and disaster-vulnerable communities, mechanisms for incentivising compliance with safety and risk-reduction measures, and strategies for improving public understanding of disaster-insurance products.
Civil society organisations such as the Misornu Safety Centre dedicated to creating safer communities through education and collaboration, and the Foundation for Security Development in Africa (FOSDA) can contribute by supporting public education, community engagement, and behavioural-change initiatives that promote a culture of safety and preparedness.
Ultimately, disaster resilience is not solely the responsibility of government. It requires collaboration among public institutions, the private sector, communities, and individual citizens. The sooner the authorities begin this conversation, the better prepared Ghana will be to confront future disasters with confidence and resilience.
Moving from disaster relief to disaster resilience requires a change in mindset. It requires thinking beyond emergency assistance and towards long-term preparedness, protection, recovery, and resilience.
Parametric insurance may not be a complete solution. However, as part of a broader national resilience strategy, it offers Ghana an opportunity to build a future where citizens are not only protected from disaster risks but are also better equipped to recover from them.
The question is no longer whether Ghana will face another major disaster, but whether the nation will be adequately prepared when it does. By embracing innovative financing mechanisms alongside effective disaster risk reduction measures, Ghana can shift from a cycle of reaction to a culture of resilience; protecting lives, safeguarding livelihoods and securing sustainable national development for generations to come. The time to begin that conversation is now!
GNA
Edited by Agnes Boye-Doe
(DCOP {Rtd} David Senanu Eklu, CPP {ASIS International}is the Executive Director of MISORNU Safety Center. Email: [email protected])