To identify a framework for adoption by insurance industry for enhancing insurance penetration
Date
2016
Authors
Barasa, Kevin
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
In the Kenyan vision 2030 economic blueprint, the government has set out
clearly the need for a comprehensive access of insurance services for all people in a
country regardless of their socio-economic levels. The need to be covered by
insurance is essentially higher for people on the lower-end of the income structure
as they are prone to a myriad of problems such as illness, unexpected loss of income
and vulnerability to a host of misfortunes. Hence, this provokes a need within the
business environment to bridge the gap of insurance services inclusion to this group
of people who have a dire need for the cover. In the market, insurance industries
have been struggling to exert their presence among this group of clients to no
substantial gain. It is due to this challenge that this study seeks to propose a
framework that if adopted geared towards promotion of better insurance uptake.
The research utilized determinants, challenges and strategies as the
parameters that will help to measure the insurance penetration. The theoretical
background of this study was based on the agency theory, and utility theory. The
empirical review was enhanced through an analysis of previous studies on the select
topic. This research adopted a cross-sectional study design where data will be
collected using structured questionnaires and data analysis conducted using SPSS.
The data was presented using tables, charts and bar graphs where possible. Based on
previous research findings showed that outlook reports this study will seek to come
up with a framework that will enhance insurance penetration. The validation of the
framework was carried out with the help of four selected insurance firms. Findings
showed that the predictor variables (Determinants, challenges and strategies) were
attributed to 72% changes in insurance penetration.
The validation of the framework showed that the framework can be utilized
by insurance firms towards enhancing insurance penetration. Findings from the
research showed that technology, customer awareness, pricing, government
intervention, regulatory framework and innovation were the key determinants of
insurance penetration. The main challenge to insurance penetration were identified
to be poor customer awareness, marketing and distribution channels, lack of
government/regulatory support. The majority of the respondents also felt that
insurance firms lagged behind in terms of differentiating their products hence
constrained customer preference. Findings also showed that the main strategies that
can extensively enhance insurance penetration were government involvement,
pricing and forming strategic alliances. The researcher recommends that insurance
firms should engage the government and the regulator in drafting new laws meant to
foster insurance penetration. The study further recommends adoption of new
technology that will foster better product innovation, customer handling and better
differentiation of products.
Description
A Thesis Submitted in Partial fulfillment of the Requirement for the Degree of Masters of Business Administration
Keywords
insurance, Penetration, Marketing