Determinants of Demand for Life Insurance and Its Challenges and Opportunities: The Case of Nyala Insurance S.C

This thesis sought to assess and analyze determinants of demand for life insurance and its challenge and opportunities. NISCO’s insurance company was selected from a total of ten composite (Life & non-life) insurance companies which are providing life insurance services in Ethiopia. Primary data were collected 393sample respondents’ which were selected using random sampling techniques. Structured questionnaire and secondary data were collected from different books, journals, NBE reports and internet. The collected data were analyzed using descriptive statistics and binary logistic regression analysis. The study found that all the tested independent variables have positive impact on determinants for demand of life insurance except social security and religion. This study also intended in search for challenges and opportunities of life insurance in NISCO. Descriptive research design was used to identify the challenges and opportunities of life insurance in NISCO. Quantitative and qualitative research approach and Survey method was used. Semi structured 5 lickert scale questionnaire and self-administered interview were used as a data collection instrument. Finding of descriptive analysis shows that income, wealth and family size are found to be the economic challenges whereas awareness, education, urbanization, religions are demographic challenges. The regression result of the model Family size, Dependent ratioCustomer awareness, Occupation, Religion, gender, Possibility of loss, social security, wealth, income and urbanization level were statistically significant at 5 percent of level. Lack of awareness ,religion and culture attitude, old labor force, income household, lack of local actuarial in the industry insurance were the challenge in demand of purchasing life insurance at NISCO. Regarding the opportunities, emerging information technology, enforcement of insurance companies to customize their process using information technology, initiatives of the government in human development in the stream of insurance, the effort of globalization, the increasing trend of middle income group, the increase in population and the untapped market of life insurance are the opportunities for the development of life insurance. Finally, the researcher recommends that based on the finding, customer awareness, political stability religion, family size, and urbanization and dependence ratio and income need attention to enhance demand of house hold to purchase life insurance in NISCO.