Factors affecting uptake of general insurance in Kenya: a case of Small and Medium Enterprises in Gikomba Market, Nairobi City County, Kenya
Date
2025
Authors
Sewe, P.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Insurance plays a critical role in risks management through risk pooling. However, in the year 2022, Kenya insurance penetration was 2.17% and major insurable risk events have happened causing enormous losses to businesses. It is therefore evident that majority the businesses affected by these frequent incidences like fires and burglaries in the recent past have been lacking insurance protection thereby affecting their recovery processes. This study sought to establish factors affecting uptake of general insurance in Kenya by doing a case study small medium enterprises (SMEs) operating within Gikomba Market, Nairobi City County, Kenya. The specific objectives of the study were to determine the effect personal characteristics, insurance products characteristics and insurance regulatory framework on the uptake of general insurance in Kenya. Descriptive cross sectional survey design was adopted. Businesspeople from different enterprises were sampled at the same time. The sampling frame comprised of all 4201 SME traders registered with the Nairobi City County through application of trading licenses. Stratified Simple random sampling method was used to select a total of 365 respondent from the population. Primary data was collected through a questionnaire which contained closed ended questions to standardize responses. Collected data was inspected for completeness and necessary editing done to ensure accuracy, consistency, and completeness. Incomplete data was set aside to limit distortion of the results. The study used descriptive statistics for quantitative data that included means generation, frequencies, standard deviation, and percentages to help generalize the findings. Tables and figures were used to present the data. Correlation analysis was done using Spearman rank. The three factors collectively explained significant variation in the uptake of general insurance. A one-unit increase in Personal Characteristics is associated with a significant unit increase in the Uptake of General Insurance. A one-unit increase in Insurance Product Characteristics is associated with a significant unit increase in the Uptake of General Insurance. A one-unit increase in Regulatory Framework is associated with a significant unit increase in the Uptake of General Insurance. The study recommended that SME operators need to improve their financial literacy skills to fully grasp the essence and importance of general insurance. Insurance companies need to expand their product offerings to include diverse insurance packages that cater to the unique needs of SMEs in Gikomba Market. Insurance companies and agencies should ensure active collaboration with regulatory authorities to address emerging issues and collaboratively develop innovative solutions.
Description
Full - text thesis