Determinants of insurance penetration and density in under developed, developing and developed countries

Abstract

The need for greater Insurance penetration in both life and non-life segments has been underscored by economic surveys . Insurance penetration has remained low not only in Kenya but in Africa as a whole and other under developed and developing countries. This study is set out to establish factors causing the low Insurance uptake, the challenges faced by the insurers in marketing their products and subsequently identify strategies the Insurance Companies can adopt to enhance Insurance uptake. This is through the studying the relationship more so between Insurance Penetration and Density and their determinants in developed, developing and under developed countries, with the aim of finding out if there exists a relationship and why this relationship holds. This is to help in understanding why developed countries with high insurance penetration and low market shares among firms, both competing and non-competing are doing better than those with the inverse of this relationship more so under developed countries. Secondary data was collected via financial reports of insurance firms and insurance performance within countries via the regulatory bodies . In as much as there are various obvious ways of improving insurance penetration in countries, this study highlights that various insurance policies and regulations goveming the insurance industry have an effect on the performance within the insurance firms in as much as the mechanisms to promote rapid insurance penetration do exist, by studying the above phenomena.