EFFECT OF MICRO-INSURANCE SEGMENT ON INSURANCE UPTAKE IN KENYA

Abstract

Microinsurance is the protection of low-income people against specific perils in exchange for regular premium payment proportionate to the likelihood and cost of the risks involved. With insurance uptake in Kenya still low, micro-insurance has been identified as a critical segment to deliver new products to the low-income population. Causal effect research design was used for the study. Secondary data on Microinsurance general premiums, Microinsurance life premiums and number of Microinsurance policies for the period 2009 to 2014 was obtained. The sample size was 10 insurance companies chosen to obtain the premiums, and number of scores for the years 2009 to 2014. The study used both descriptive and inferential statistics in analyzing the data. The multiple linear regression equation used took into consideration three independent variables for the 10 companies. The results revealed that Microinsurance variables influencing insurance uptake in Kenya, namely; micro-insurance general premiums, micro-insurance life premiums and number of Microinsurance policies influenced it positively. The study found out that the intercept was 0.790 for all years. Independent variables explain a substantial 69.3% of insurance uptake in Kenya as represented by adjusted R² (0.693). The study recommends that all insurers should invest in market analysts to help them research more on favorable Microinsurance products and this would improve insurance uptake. The study concludes that Microinsurance segment has a significant effect on the insurance uptake in Kenya.