The Influence of Innovative Strategies on Insurance Penetration in Ethiopia: The Case of Nyala Insurance S.C
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Date
2024-03-14
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Publisher
AAU
Abstract
Insurance drives economic growth by managing risk and channeling funds, insurance companies
fuel development in every economy. The insurance industry in Ethiopia suffers from a severely low
insurance penetration. The penetration rate of insurance in Ethiopia is estimated at 0.32% which
is very low compared to other countries. The study was undertaken to investigate the influence of
innovative strategies on insurance penetration in Ethiopia. To foster a better understanding of the
study variables the evolutionary theory of economic change was utilized. The study used a mixed
research methodology and employed a correlational research design to achieve the research
objectives. The study evaluated the influence of innovative strategies on insurance penetration in
Ethiopia by measuring the level of implementation of innovative strategies. The study chose to
focus on the Nyala Insurance S.C. a consistently high performing insurance company located in
Ethiopia. The sampling frame of the study consisted 207 insurance professionals; while the sample
was 106 individuals drawn from four departments: claims, finance, marketing, and underwriting
department. Data was collected through the use of closed-ended questionnaires. Out of the 106
questionnaires disseminated 102 were duly filled and returned. The various demographic features
and results obtained were presented using tables. The data collected was then analyzed and simple
linear regression analysis was used to show the relationship between the independent and
dependent variable. The findings of the descriptive statistics revealed that the level of
implementation of innovative strategies is high but leaves room for more to be desired. The
inferential analysis evidenced that innovative strategies have a significant positive influence on
insurance penetration. The research delivers clear conclusions, actionable recommendations for
future research, and insights for key players like insurance firms, investors, and policymakers in
Ethiopia.