MDF Theses and Dissertations (2024)

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Browsing MDF Theses and Dissertations (2024) by Author "Mwila, C."

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    The Effect of risk factors on pricing of general business insurance products before and after COVID-19 pandemic: evidence from Kenya
    (Strathmore University, 2024) Mwila, C.
    Pricing is one of the critical practices of the insurance industry. In Kenya, very little research has investigated effect of risk factors on pricing of general business insurance products which is the gap that this paper aims to bridge. The study’s main objective was to determine the effect of risk factors on premium pricing of Kenya’s general business insurance products before and after Covid-19 pandemic, particularly with a focus on the motor insurance product line. The study was anchored on the Game theory. The research method used was quantitative, which informed the adoption of a cross-sectional study design and the target population comprised of all the registered general business insurers which were sampled out of a population of 61 insurers in Kenya. A census method was applied to select all the general insurers. This study utilized both secondary and primary data collection techniques. For secondary data, panel data on premium pricing and documented aspects of risk factors was sourced from published annual reports for the period 2018 to 2021 while primary data was obtained through questionnaires filled by risk officers, actuaries and insurance managers in four different departments of the selected insurance firms. The extracted research data was analyzed using Stata 16 and Statistical Package for Social Sciences (SPSS) version 28. Descriptive analysis described the data in terms of charts, frequencies, percentages, mean scores and standard deviations. The research also adopted a multiple linear regression analysis and multiple binary logistic regression to estimate the influence and effect of the independent variables on premium pricing for general business insurance products in Kenya and the results of the study were presented using tables. The study found that insurance sector regulation, prior insurance coverage, underwriting risk and market value had a significant effect on premium price. The study recommends that insurance companies adopt risk-based pricing in their pricing methodologies used for insurance products and that policies are put in place to ensure that the key risk factors identified as having an effect in the pricing of general business products such as motor insurance products are factored in their pricing methodologies. This would in turn assist in the overall enhancement of the profitability of Kenya’s sector.