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Life insurance class of insurance sector in Kenya has been facing overwhelming challenges in its struggle to acquire its market share in the industry. It has only been able to cover a simple 6.8% of the Kenyan population, leaving majority of Kenyan (93.2%) without protection through life insurance. It is therefore difficult to assure the quick recovery and fast back to productivity majority of Kenyan after a misfortune, which would heavily burden the economy of Kenya. Other people, who are dependants, of the injured or the expired suffer heavily, in economic, psychological, physical, and social terms. The failure of growth of life insurance business in Kenya is attributed to; socio-economic factors, demographic factors, and institutional factors. None of the many studies conducted on life insurance attributed the growth of life insurance business in Kenya to; socio-economic factors, demographic factors, and institutional factors, which motivated this study.The objective of this study was to determine the factors that influence growth of life insurance in urban Kenya. The study used descriptive survey method and targeted the 3,255 staff of the 22 life insurance companies. The sample was of 70 respondents. The respondents were selected using systematic random sampling technique. Data was collected using a semi structured questionnaire. Collected data were checked for errors and corrected accordingly. Data was analyzed using descriptive statistics and inferential statistics (using chi-square tests). The study found out that the three factors; socio-economic factors, demographic factors, and institutional factors were determinants of growth of life insurance business. More specifically, the study established that most people do not seek life insurance owing to; their low-income status, irregular earning patterns, and high cost of insurance premium rates. Further, it found out that large families did not seek for life insurance. Other findings were that; people failed to seek for life insurance owing to; lack of education and knowledge, age factor, and their marital status. It was found out that claim processing highly influenced growth of life insurance business in Kenya. The study recommended that the insurance industry should adopt the micro-insurance concept, put in place a micro-Insurance Legal Framework, review shareholding structure policies; insurance companies to increase public education on insurance, Government of Kenya to have policies enabling it to come in when an insurance company is having issues, benefit, Insurance companies to enhance their claim polices to ensure fast claim processing, and proper communication strategy to be instilled in the channels of distribution. |
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