FACTOR AFFECTING INSURANCE PURCHASING HABIT OF CUSTOMER IN ETHIOPIA (CASE STUDY OF WKU LECTURERS)

Abstract

Insurance is an important aspect of the social-economic development of the country. Despite its importance the consumption of insurance in Ethiopia is very low compared to other countries. The main purpose of the study is to identify and investigate factors affecting household's consumption of insurance in Ethiopian (case of wolkite). Based on the reviewed literature "awareness", "income", "religion", "product variety" and "premium" were identified. The study employed descriptive and explanatory research design. The population of the study was wku lecturers. Out of eighty eight questionnaires administered, seventy usable questionnaires were obtained constituting 79.8% for analysis. Primary data were collected. The study employed structured questionnaires as the main research instrument. Descriptive statistics was used to summarize the respondents’ demographic characteristics. Multiple regression analysis was used to explain the nature of the relationship between household’s consumption of insurance and factors that influence it. Results of the study showed that all the factors except religion and premium had significant relationship with insurance consumption. Variables awareness and income had positive relation with but product variety had inverse relation with insurance. The regression results also showed that 53.3% of the variation in household's consumption of insurance can be explained by the changes in these identified factors. With these findings, this study provides many implications and if these are taken in to consideration by insurance company, households’ consumption of insurance can be greater than before identifying improvement technique