Modelling of insurance penetration contribution to the economy.
Muriithi, Susan Waithera
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The study was set to understand the relationship between the economy of the country and insurance penetration. The relationship between the two would be important to understand the contributions of insurance penetration to the economy as well as recognize what causes the low insurance penetration rate. The availability of already published information on these factors was reliable and due to this reason, the use of primary data was not obtained. The data was available from the Insurance Regulatory Authority as well as the Central Bureau of Statistics and sigma-explorer. The target population was the already registered number of insurance companies and a cover period of the past five years which was key since the penetration rate in the country has been dropping ever since 2013 when it was at its highest. The model used was a regression analysis which combined the major determinants of insurance penetration the variables to be used in the regression. This include assets, investments and investment income and the Gross Premium Income. Fromthe analysis the Gross Premium Income was seen to be the leading factor in the insurance industry to be contributing to the national economy. The insurance sector is the major contributor to insurance penetration by the decision they make in everything from the distribution channel, promotion methods, pricing, benefits provided, technology used, and everything in general and still maintaining a competitive advantage. Every decision they make is a contribution towards the economy. Due to their major role in all this the study examines what is done and how this affects the penetration rate and what can be done to change ad improve this.