Determinants of Life Insurance Demand in Ethiopia
No Thumbnail Available
Date
2020-03
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
Insurance is the most widely used risk management technique for both individuals and businesses. The purpose of insurance is to compensate for financial loss, not to provide an opportunity for financial gain. This research was aimed to examine the determinant of life insurance consumption in Ethiopia. It attempts to identify how GDP per capital income, inflation, real interest rate, life expectancy and dependency ratio for the demand of life insurance in Ethiopia. In order to satisfy the objective of the study the researcher used quantitative research approach by adopting purposive sampling technique and explanatory type of research design. The samples used for this study were secondary data for a period of 39 years starting from 1980 through 2018 for a time series data that collected from annual life insurance premium national bank of Ethiopia. The study tested for the assumptions of CLRM. The study used Stata11 econometric software package to aid in data analysis. An econometric model was used to examine the relationship between GDP per capital income, inflation, real interest rate, life expectancy and dependency ratio and the determinants of life insurance demand in Ethiopia as indicators of life insurance consumption. Outcomes of the study revealed that the existence of a positive and significant relationship between INC/GDP per capital income and the demand of life insurance in Ethiopia, a positive and significant relationship between life expectancy and the demand of life insurance, there is a negative and significant relationship between inflation and demand of life insurance in the case of Ethiopia. The study concluded that there was insignificant relationship among real interest rate with the demand of life insurance in Ethiopia. The study recommends that the government tries to give much emphasis in increasing INC per capita (real income) of society through more investment, and job creation. So that INC per capita (income,) increases life expectancy and decreases dependency ratio which in turn promotes demand for life insurance in Ethiopia.
Description
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
Keywords
Demand and Ethiopia, Determinant,life insurance