DETERMINANTS ON LONG TERM INSURANCE DEMAND; IN THE CASE OF ETHIOPIA

Abstract

The main aim of this thesis was to assess the issue of factors affecting demand for long term insurance in Ethiopia. The motive behind making this research lies on the low emphasis given to the factors affecting long term insurance consumption in Ethiopia. Particularly no research was specifically made to assess the effect of religion, income, and awareness on long term insurance demand. The study is basically a survey that used both qualitative and quantitative approaches. For the purpose of data collection self administered questionnaire was adopted, pre-tested and personally administered to the target population by following the appropriate ethical procedures. Out of the distributed four hundred three hundred ninety one questionnaires are found error free and used for this study purpose. That means above 97.75% return rate was achieved from the questionnaires distributed to all religious groups. Therefore, the entire analysis given in this study is based on the actual questionnaires returned. The finding proves that there is a strong positive correlation between awareness and long term insurance demand in Ethiopia. The correlation between income and long term insurance demand was found to be negative but with moderate strength. Based on this, it’s recommended that what is needed from long term insurance companies is teaching people and creating awareness of the role and benefit of long term insurance. Finally, the researcher believes that the result of this assessment contributes to the growth of long term insurance business in relation to the economic development of the country at large through provision of valuable information to the society and future interested researchers in the area as well as decision makers in the insurance industry stressing the factors actually affecting the demand for long term insurance in the future.