Ghana Motor Insurance Pricing Framework
GLM-Based Actuarial Reference Rates • Orbotrice Institute
Vehicle & Policy Details
Estimated Annual Premium
Factor Breakdown
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Claims Data
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Rating Factor Relativities
These multiplicative factors adjust the base rate based on risk characteristics. A relativity of 1.00 is the base level; higher values indicate higher risk.
Vehicle Type
| Type | Frequency | Severity | Pure Premium |
|---|
Region
| Region | Frequency | Severity | Pure Premium |
|---|
Use Type
| Use | Frequency | Severity | Pure Premium |
|---|
Driver Age
| Age Band | Frequency | Severity | Pure Premium |
|---|
GLM Estimate vs. NIC 2026 Tariff
This table compares the tool's independently estimated GLM premiums against the NIC's published 2026 tariff structure. The NIC Third Party rates are official regulated amounts (effective 16 February 2026). The NIC Comprehensive estimate adds an OD component at 5.5% of sum insured (midpoint of the NIC's 5–7% guideline range). The GLM column is the tool's independent actuarial estimate.
How to read this table
Green (GLM < NIC): GLM suggests a lower premium than the tariff estimate — the tariff may include a safety margin or cross-subsidy.
Red (GLM > NIC): GLM suggests a higher premium — the tariff may be inadequate for the underlying risk.
Grey (<5%): Broadly aligned — both approaches produce similar results.
| Vehicle Class | NIC TP Rate (Published, GHS) |
NIC Comp. Est. (TP + OD + Hosp, GHS) |
GLM Estimate (Independent, GHS) |
Difference | Insight |
|---|
Sources & Assumptions:
• NIC TP rates: NIC Motor Third Party Insurance Rate Schedule, effective 16 February 2026 (InsureGhana / NIC).
• OD component: Estimated at the user-selected rate (default 5.5%) applied to the sum insured. NIC Motor Tariff Guidelines indicate 5–7% for comprehensive cover. Actual OD rates vary by insurer and risk assessment.
• Hospitalisation levy: GHS 84.04 per vehicle (standard NIC levy).
• NIC Comprehensive Estimate = NIC TP Rate + (OD Rate × Sum Insured) + GHS 84.04.
• GLM Estimate: Independent actuarial calculation using this tool's relativities. Assumptions: Greater Accra, private use, driver 36–45, vehicle age 6–10 years, no NCD, comprehensive cover.
• Vehicle age loading: NIC tariff applies 5% loading for 5–10yr and 7.5% for 10+yr vehicles. The NIC Comprehensive Estimate here includes the 5% age loading (consistent with the 6–10yr GLM assumption).
GLM Methodology
This tool uses Generalized Linear Models (GLM), the international actuarial standard for non-life insurance pricing. The approach separates frequency (how often claims occur) from severity (how large claims are), then combines them into pure premium relativities.
Frequency Model
Poisson distribution with log link function. Models claim count per policy.
Severity Model
Gamma distribution with log link function. Models average claim amount given a claim occurred.
Pure Premium
Pure Premium = Frequency × Severity. This represents the expected claims cost before expenses and profit loading.
Premium Formula
Data Security
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