An Investigation into demand for life insuarance in Kenya
Life insurance is an issue of concern to many Kenyans, insurance firms and government. Life insurance includes a range of social an financial services needed by individuals who need to secure the continued financial and social security of their families and dependants after the insured has died. Research on the market penetration of firms has been a key focus of organizational studies since the 1960s but has only more recently attracted more recently attracted the attention of life insurance practitioners. In spite of the increasing importance that life insurance has in mobilizing savings, covering life risks and providing term finance, it is not yet understood well what drives this demand. A number of authors have proposed a variety of different socio-economic and institutional factors as possible determinants of life insurance penetration such as income, demography, distribution to mention a few. The main objective of the study was to investigate the demand for life insurance in Kenya and sought to establish the determinant factors for the demand for life insurance by using national survey on data financial access of 2006. A comprehensive literature review was undertaken based on which a conceptual framework was developed as basis of the formulation of hypothesis. Research methodology stating the research method, research design and description of secondary data to be used in the research analysis were formulated. Using secondary data, Logit model was used to estimate regression equation to test hypothesis. The resulting estimations demonstrate that the demand of life insurance is determined by age, gender, secondary and primary education, university education, location, income and household size. The study finally looks at the limitation of this study, recommendation and conclusion which indicates that some of the test variables affect demand on life insurance in Kenya, there is need for further comprehensive research to test more variable particularly on the supply side. The study findings (See Appendix D) will form the basis for technical and policy advice to the Insurance Regulatory Authority, Association of Kenya Insurers and the Government with a view of understanding demand for life insurance in Kenya.