|dc.description.abstract||This research study sets out to examine whether the growth of microinsurance in
Kenya is affected by how insurance underwriters price their products. The research
objective was to establish how product pricing affects the growth of microinsurance
by insurance underwriters in Kenya.
The research adopted an experimental research design and was based on multiple
linear regression analysis of secondary data. Data was collected from 7 insurance
companies which underwrite microinsurance. The dependent variable used was the
gross premium which was a proxy for the growth of microinsurance and the
independent variables used were incurred expense ratio, incurred claims ratio and net
income ratios which were proxies for product pricing. The coefficient of
determination was used to check the fitness of the model. A t-test statistic was used to
test the significance at 5%.
The findings of this research establish that there exists a relationship between the
gross premium and the incurred expense ratio, incurred claims ratio and net income
ratios. The study established that there was 87.9% variation in gross premium which
could be explained by the independent variable thus deeming the regression model fit.
There was a positive correlation between the expense ratio 0.555, claims ratio 0.239
and net income ratio 0.914 and the gross premium, which is significant at 5%
implying that an increase in the above ratios will indicate an increase in the gross
premium. This doesn’t mean that there is an increase in the earned premiums but
simply indicating an increase in the business underwritten. Further research should be
done putting into consideration the earned premiums and using the growth ratio as the