Factors Influencing Penetration of Micro-insurance in Kenya
Abstract
The need for enhanced access to insurance at affordable rates to the lower end of the
market is well set out in the Kenya Vision 2030 and other government policy
documents.
The need for insurance services is important for low
-
income groups as they are more
vulnerable to ill
-
health or death, unexpected expenses, and natural disasters.
Consequently, there is need to reach to this group and mitigate their level of ris
k since
when it occurs, it is bound to drive them to deeper level of poverty. To bridge this need,
insurance firms have developed products that target this section of the market. However,
several challenges are affecting the success of rolling out the prod
ucts into the insurance
to the market. This research sought to establish factors influencing penetration of micro
-
insurance in Kenya. The research adopted a descriptive research design whereby data was
collected using a self
-
administered questionnaire tha
t was distributed to 24 senior and
middle level managers at the tagerted insurance firms. The study found that a range of
products were being offered under the micro
-
insurance products which targeted
agriculture and livestock farmers, personal accident fo
r students on attachment, loan
insurance for small traders, health products. The payment mode for the insurance
premiums was majorly through Mpesa. The factors that affect the micro
-
insurance
penetration is the low level of income among the target market,
perception that insurance
process is generally complex by the target market and limited distribution channels and
branch networks of the micro
-
insurance providers in Kenya. Since, the basis of the
research was based subjective evaluations by the senior ma
nagement, the findings might
have elements of subjectivity considering that they will be involved in implementation of
the strategies targeting more coverage of the micro
-
insurance products. Because of the
limited knowledge on the insurance products, there
is need for a rigorous and well
coordinated education on insurance to be offered to the target market and this will rope in
the support of donors and the central government