THE EFFECT OF OPPORTUNITY AND CHALLENGES ON MOTOR INSURANCE: THE CASE OF ETHIOPIAN INSURANCE CORPORATION

Abstract

The purpose of this study was to empirically assess the effect of opportunities and challenges on motor insurance portfolio of EIC. The sample consisted of 167 employees of the corporation. A structured questionnaire, with a five-point Likert scale, was used. As a result, government policy, the growth of import and export in the country and future opening of reinsurance Company are identified as the main opportunities for motor insurance sector. Claim expense, the future opening of global insurance companies in the country and lack of awareness of customers about motor insurance are found to be the main challenges faced the sector. Correlation and regression techniques were used to examine the relationships between opportunity, challenges and motor insurance development. Results of regression analysis show that opportunity and challenge are significant in affecting the motor insurance. Moreover, the results revealed that on the whole, the positive effect of opportunities is emerged as the most significant factor than the impact of challenges on motor insurance. The implication thus is EIC need to strive on utilizing the existing opportunities than focusing on mitigating challenges in order to attain high growth in motor insurance.