Determinants of Policyholders' Retention on General Insurance in Ethiopia: The Case of Selected Insurance Companies in Addis Ababa City
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Date
2024-06-01
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A.A.U
Abstract
The main objective of this study was to identify the determinants of policyholders' retention of
general insurance in Ethiopia, focusing on selected insurance companies in Addis Ababa.
The research targeted policyholders of selected companies as the population, examining
prompt claims handling, good underwriting practice, competition, technological
advancement, and insurance benefit knowledge as independent variables influencing
policyholder retention, the dependent variable. An explanatory research design was adopted,
utilizing primary data to predict cause-effect relationships. Data were collected through a
questionnaire based on a five-point Likert scale, administered to policyholders from six
insurance companies selected via mixed sampling. Out of a target population of 299,015, a
sample of 422 respondents was chosen, and 386 questionnaires were returned. Pearson
correlation and multiple linear regression analysis were conducted using SPSS version 20 to
examine the relationship between the independent variables and policyholder retention. The
results indicated that variables namely prompt claims handling, good underwriting practice,
market competition, technological advancement, and insurance benefits knowledge
significantly affect policyholder retention. Based on the findings, it is recommended that
insurance companies prioritize improving claims handling processes, good handwriting
practice, market competition, and insurance benefits knowledge significantly to enhance
policyholder retention.