Factors Determining Life Insurance Premium: The Case of Ethiopian Insurance Corporation (Eic)
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Date
2024-09-18
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A.A.U
Abstract
Insurance pricing is a crucial aspect for insurance companies as it directly impacts their
profitability. To maximize revenue, insurance firms need to stay updated on the factors
influencing insurance pricing decisions. The primary objective of this study is to identify the
factors that affect life insurance pricing within the life insurance sector, specifically focusing
on Ethiopian Insurance Corporation in Addis Ababa, Ethiopia. The research targets both
management and non-management employees of Ethiopian Insurance Corporation life
insurance department, considering variables such as Demography, Claim settlement,
Government regulation and Competition level as predictors of Life
insurance pricing. This study employs an explanatory research design to explore the
factors influencing life insurance pricing in the life insurance industry. The Data was
collected through questionnaires from a census of 92 employees of Ethiopian Insurance
Corporation’s life insurance department. The analysis utilized Pearson correlation and
multiple regression techniques via SPSS 26.0 to assess the relationships between the
independent variables and life insurance pricing. Findings indicate that all identified factors
contribute to life insurance pricing; however, claim settlement has the most significant
impact compared to demography, competition level and government regulation.
Consequently, insurance companies should develop strategies to effectively address these
factors to enhance the life insurance pricing strategy of the insurance sector.
Keywords: Life insurance pricing, Demography, Claim settlement, Government regulation
and Level of competition.