Agricultural micro-insurance in Kenya: determinants of the loss and profit experienced in insurance companies in Kenya in 2014
ABSTRACT The Kenyan agricultural production sector is faced with a lot of risks that will affect a farmer's level of income. The Kenyan insurance market offers two types of-agricultural micro insurance products, index based crop insurance and indemnity based crop insurance. This study has investigated the significant factors that affect profitability of an insurance company. To provide answers to the research questions quantitative methods were employed. Use of simulation of variables, correlation tests, and regression analysis were the major quantitative tools used to analyse the data availed. The results of the study conducted showed that companies that offer index based products are more profitable compared to companies that offer pure indemnity products. It was also noted that a combination of both products leads to a higher profit margin as opposed to offering pure based products.