Regional and Local Development Studies

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Factors Determining Demand for Microinsurance:The Case of Addis Ababa
(Addis Ababa University, 2023-09) Amanuel Demelash; Frew Mengistu (PhD)
The study’s primary objective was critically examining and identifying “The Demand for Microinsurancein Addis Ababa.” The study employed a mixed type of research approach. Respondents of the study wereselected using cluster random sampling. Data was gathered using surveys, interviews, focus groupdiscussions, and secondary sources. Data gathered were analyzed using linear regression, contingent, and thematic analysis. The results indicate that there is low and moderate awareness level amonglowincome households. The primary factor af ecting demand for micro insurance is the willingness topay. Willingness to pay is af ected by factors such as price, transaction cost, risk aversion and quality of theproduct, trust in the insurer, capacity to pay, and awareness level. The study further informedthecapability of micro insurance institutions in Addis Ababa to distribute micro insurance products. Finally, the study recommends that policymakers and stakeholders review the policies and strategies of microinsurance by addressing the awareness level and enhancing perceived values and willingness topayof low-income households.