THE DETERMINANTS OF DEMAND FOR MICRO INSURANCE SERVICES IN KENYA

Purpose: The purpose of this study was to determine the factors which influence the demand for micro insurance services in the insurance industry in Kenya.Methodology: The study adopted cross sectional survey design. The target population was insurance service providers in Kenya licensed by the Insurance Regulatory Authority (IRA). Sampling technique was stratified random sampling. A questionnaire was used in the collection of primary data which was analyzed using Statistical Package of Social Sciences (SPSS). Analysis of data was done using descriptive and inferential statistics. Regression and correlation analysis was done to test the relationship between the study variables.Results: The study findings indicated that risk exposure, price, access to credit and income level are significant determinants of micro insurance demand. Gender, age and level of education were found to have a positive and significant influence on the demand for micro insurance. The study concluded that micro insurance demand is affected by economical and structural factors and that the potential is yet to be exploited.Unique contribution to theory, practice and policy: The study recommended that awareness and education be conducted to the public; flexible and convenient payment option be availed; easy access to credit; the regulator to put in place a framework for micro insurance and the government to offer subsidies and incentives towards micro insurance services.