Determinants of Life Insurance Demand in Ethiopia

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title


Addis Ababa University


One of the ways of protection a family in case of hardships in life, life insurance is a very important and necessary protection. Among the different problem people face in life are; the breadwinner dies or is disabled and cannot generate income. It also uses for saving purpose and it pays the sum assured in case of maturity the insured can take loans from the saved amount. Although the performance of the insurance industry is closely linked to economic conditions, the life insurance business has been experienced low level of development in Ethiopia. This study’s aimed to investigate determinants of life insurance demand in Ethiopia. Ordinary Least Squares (OLS) regression was used to examine the effect of level of income, premium of life insurance, life expectancy, education, financial deepening and inflation on life insurance demand in Ethiopia over a period of 30 years from 1987/1988 to 2016/2017. The collected secondary data were analyzed with multiple regression analysis by using Eviews8. In this study correlation analysis was carried out to show the direction of relationships among the dimensions included in the model. Moreover, regression analysis was conducted to determine the predictive values of the variables. The findings revealed that life expectancy has statistically noticeable negative effect on the life insurance demand in Ethiopia. In addition to that, results shows that the education, per capita income and financial deepening have statistically significant positive influence on life insurance demand in Ethiopia. The other findings discovered that premium of life insurance and inflation has insignificant impact on life insurance demand in Ethiopia for the study period. Based on this finding, the researcher recommended that the government tries to give much emphasis in increasing real income of the people, insurance education for tertiary levels by life insurance companies and national bank of Ethiopia give training for domestic actuaries to support life insurance industry.


A Thesis Submitted To Department Of Accounting& Finance in Partial Fulfillment of the Requirements for the Degree of Master of Science in Accounting and Finance


Ethiopia, Financial Deepening, Life Insurance