THE IMPACT OF PRICE REGULATION ON THE PENETRATION OF INSURANCE IN KENYA. A STUDY OF THE REGISTERED INSURANCE COMPANIES IN NAIROBI COUNTY
Mwongela, J. N.
Muriithi, S. K
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Insurance plays a critical role as a safety net in the face of a loss and unforeseeable risks. It is well understood and explained as a social means to mitigate risk connected to the loss of life or property. A significant benefit of insurance to an economy is its ability to facilitate economic growth by according the players a stable platform through which economic processes can function flawlessly. The study aimed to find out the impact of price regulation on the penetration of insurance in Kenya. It was that the insurance sector in Kenya was served by 55 insurance companies and 8,700 insurance agents yet still the insurance penetration index remained low. Indeed, despite the significant increase in insurance companies and insurance agents, over the last ten years, the country’s insurance penetration level has lingered at 3.01%, an index comparatively lower than Africa continent’s average of 3.8%. Kenya’s low penetration level of insurance products, in effect, denies the country social and economic development. A population of 110 respondents was drawn from the 55 insurance companies; a unit manager and a marketing manager. The study employed the census method: all the managers from the two categories were included in the study. Structured questionnaires were used to collect the data, these were dropped and picked after completion. Descriptive statistics and inferential statistics were run on the data set to inform interpretation and discussion in line with the objectives. The results indicated that price regulation is significantly associated with insurance penetration in Kenya. The odds of insurance penetration would be 2.083 times more with price regulations than without price regulations. Moreover, regulation on pricing involving setting of price models, price listing, price change processes, setting of minimum and maximum prices for insurance products, within the regulatory framework have significant influence on insurance penetration.
CitationMwongela, J. N., Muema, W., & Muriithi, S. K. (2020). The impact of price regulation on the penetration of insurance in Kenya. A study of the registered insurance companies in Nairobi County. The Strategic Journal of Business & Change Management, 7 (4), 1583 – 1588.
The Strategic Journal of Business & Change Management,