ISSN (Online): 2321-3418
server-injected
Economics and Management
Open Access

Factors affecting the uptake of insurance products in the banking sector between 2013 and 2018: Case of First Capital Bank, Zimbabwe

,
DOI: 10.18535/ijsrm/v10i5.em01· Pages: 3363-3382· Vol. 10, No. 05, (2022)· Published: May 9, 2022
PDF
Views: 415 PDF downloads: 161

Abstract

The research paper evaluated the factors affecting the uptake of insurance products in the Zimbabwean banking sector. Case study of First Capital Bank (FCB) was used. The main objective of the study is to analyse the factors affecting the uptake of insurance products. The study adopted a mixed methods research design and a pragmatism research philosophy. The population was made up of 312 employees and 150 000 customers making a total population size of 150312.Qquestionnaires and interviews were used to collect data. The research findings were that customers are well aware of the endowment policy, term insurance and the whole insurance product available at FCB. In addition, the research found out that customers have limited choice in terms of the uptake of insurance policies of their choice at FCB. It was noted that there has not been an increase in the rate of consumption of insurance. The study concluded that FCB has insurance policies and uptake of insurance at FCB was low. The study concluded that economic and political factors and socio-cultural factors affect the uptake of insurance services by the people at FCB. The study recommended that bank should offer new products to the existing and should also increase its service range by offering other types of insurance services like motor vehicle insurance.

Keywords

insurance uptakeinsurance productseconomic situationlife assurance

References

  1. Abor, J. and Akotey, J. (2011) Risk management in Ghanaian Insurance Industry: Qualitative Research in Financial Markets, vol 5, no. 1.Google Scholar ↗
  2. African Insurance Organisation (2016), 1/May 2016, African Insurance Barometer 2016 Market Survey.Google Scholar ↗
  3. Anderson, D. R., and Navin, J. R. (1975). Determinants of Young Marrieds' Life-Insurance Purchasing Behaviour: An Empirical Investigation. Journal of Risk and Insurance, 42(3), 375-387.Google Scholar ↗
  4. Armstrong, K., Weber, B., FiztGerald, G., Hershey, J. C., Pauly, M. V., Lemaire, J., Subramanian, K. and Aschl, D. A. (2003), Insurance and Breast Cancer Risk Assessment Adverse Selection, Genetic Testing and discrimination, American Journal of Medical Genetics, Vol. 120A pg359-364.Google Scholar ↗
  5. Auxier, A. L. (1976). A Test of the Usefulness of Policy Information in Ranking Insurance Alternatives. The Journal of Risk and Insurance, 43, 87-98.Google Scholar ↗
  6. Beck, T. and Webb I (2003), Economic, Demographic and Institutional Determinants of Insurance Consumption across countries, World Bank EconomicGoogle Scholar ↗
  7. Beenstock, M., G. Dickinson and S. Khajuria (1986), “The Determinants of Life Premiums: An International Cross-Section Analysis,” Insurance: Mathematics and Economics, 5, 261- 270Google Scholar ↗
  8. Begam S. (2014), Service quality and its effect on policyholder satisfaction in insurance sector, Indian Streams Research Journal, Vol. 4 (4) pp.1-7.Google Scholar ↗
  9. Berekson L.L. (1972). “Birth Order, Anxiety, Affiliation and the Purchase of Insurance”, The Journal of Risk and Insurance, Vol. 39, No. 1, pp. 93-108.Google Scholar ↗
  10. Bernheim, B. D., Forni, L., Gokhale, J. and Kotlikoff, L. J. (2003), The mismatch between insurance holdings and financial vulnerabilities: evidence from the health and retirement study, The American Economic Review, vol. 93(1) pp. 354-365.Google Scholar ↗
  11. Black K. Jr., Skipper, H. D. and Black, K. III. (2012), Insurance, 4th edition, USA: McGraw-Hill.Google Scholar ↗
  12. Bull, V. (2009), Sales Management theory and practice of insurance. New York, Palgrave, 4th Edition.Google Scholar ↗
  13. Campbell, R. A. (1980). The Demand for Insurance: An Application of the Economics of Uncertainty. Journal of Finance, 35, 1155-1172.Google Scholar ↗
  14. Carson, J. M. (1996). Determinants of Universal Insurance Cash Values. Journal of Risk and Insurance, 63(4), 673-681.Google Scholar ↗
  15. Chang, D. H. (1995).Economic Analysis of the Development of Universal Insurance in the 1980s. Journal of American Society of CLU and ChFC, 49(1), 82-87.Google Scholar ↗
  16. Chatterjee, A. (2012) Understanding the role of insurance sector and its linkages for inclusive financial sector in Asia. Enhancing transparency and monitoring of insurance markets and the way forward. Bangkok: Thailand.Google Scholar ↗
  17. Cooper, R. and Schindler, S. P. (2013) Business Research Methods, 12th ed., McGraw Hill, New York, United States.Google Scholar ↗
  18. Deloitte (2016), Innovation in Insurance: The Path to Progress, Deloitte University Press.Google Scholar ↗
  19. Friedman, M. (1957). A theory of the consumption function. Princeton, NJ: Princeton University Press for the National Bureau of Economic Research.Google Scholar ↗
  20. Goldsmith, A. (1983). Household Life Cycle Protection: Human Capital versus Insurance. Journal of Risk and Insurance, 50(3), 473-485.Google Scholar ↗
  21. Gray, D. E. (2017). Doing Research in the Real World. University of Surrey: SAGE Publications.Google Scholar ↗
  22. Greene D. and Treschman R. T., (2005), “Risk and Insurance” South Western Publishing Company, Cincinnati, OhioGoogle Scholar ↗
  23. Hau, A. (2000). Liquidity, Estate Liquidation, Charitable Motives, and Insurance Demand by Retired Singles. Journal of Risk and Insurance, 67(1), 123-141. http://dx.doi.org/10.2307/253680DOI ↗Google Scholar ↗
  24. Hofmann, A. (2009). Imperfect Insurance Markets - An Economic Analysis of Externalities and Consumer Diversity. Karlsruhe.Google Scholar ↗
  25. Holton, J. A. (2008), Grounded Theory as a General Research Methodology, The Grounded Theory Review, Vol. 7(2) pp. 67-93.Google Scholar ↗
  26. Hopkins, J. (2009) Methods in sample survey. Simple random sampling systematic sampling lecture 2. Bloomberg School of public health.Google Scholar ↗
  27. Insurance and Pension Commission (IPEC), (2016), Report of Life Assurance for the 2nd quarter ended 30 June 2016, IPEC: Harare.Google Scholar ↗
  28. Kothari, C. (2014) Research Methodology. 2nd Ed. New Delhi: New Age International Ltd.Google Scholar ↗
  29. Kozak, S. (2011) Determinants of Profitability of Non–Life Insurance Companies in Poland during integration with the European financial system, vol 14,no. 1.Google Scholar ↗
  30. KPMG International. (2013), Evolving Insurance Regulation. KPMG International - Financial ServicesGoogle Scholar ↗
  31. Lin, Y., and Grace, M.F. (2007). Household life cycle protection: Insurance holding, financial vulnerability, and portfolio implications. The Journal of Risk and Insurance, 74(1), 141-173.Google Scholar ↗
  32. Loke, J., and Goh, Y. (2012). Purchase Decision of Life Insurance Policies among Malaysians. International Journal of Social Science and Humanity, 2 (5), 415-420.Google Scholar ↗
  33. Mahdzan, N. S. and Victorian, S. M. P (2013), The Determinants of Life Insurance Demand: A Focus on Saving Motives and Financial Literacy, Asian Social Science, Vol. 9(5) pp. 274-284.Google Scholar ↗
  34. Mantis, G., and Farmer, R. N. (1968). Demand for Life Insurance. Journal of Risk and Insurance, 35(2), 247-256. http://dx.doi.org/10.2307/250834DOI ↗Google Scholar ↗
  35. Manvendra, P. S. and Arpita, C. (2011), Contemporary Issues in Marketing of Life Insurance Services in India, International Journal of Multidisciplinary Research, Vol. 1(7) pp. 13.Google Scholar ↗
  36. Mark, D. (2003), Insurance Principles for sales force. Prentice Hall. India, 8th Ed.Google Scholar ↗
  37. Marwa, S (2007), Essential of Risk and Insurance, 9th edition, London: Pearson Prentice Hall.Google Scholar ↗
  38. Masiyiwa, S. (2014), Bancassurance in Zimbabwe – The Scramble for Strategic Alliances, Threats and Opportunities for insurance Brokers, International Journal of Management, IT and Engineering, Vol. 4(1).Google Scholar ↗
  39. Meyer, K. E and Tran, T. T. Y. (2006), Market penetration and acquisition strategies for emerging economies. Long range planning.Google Scholar ↗
  40. Nesterova, D. (2008), Determinants of Demand for Life Insurance: Evidence from selected CISGoogle Scholar ↗
  41. Neumann, S. (1969). Inflation and Saving Through Life Insurance. Journal of Risk and Insurance, 36(5), 567-582. http://dx.doi.org/10.2307/251163DOI ↗Google Scholar ↗
  42. Nyakazeya, P. (2016) “Insurers have to adapt” Financial Gazette 5 April.Google Scholar ↗
  43. Outreville, F. J. (1996). Life Insurance Markets in Developing Countries. Journal of Risk and Insurance, 63(2), 263-278.Google Scholar ↗
  44. Saunders, M., Lewis, P. and Thornhill, A. (2012) Research Methods for Business Students. 6th Ed. New York: Pearson Education.Google Scholar ↗
  45. Savvides, S. (2006). Inquiry into the Macroeconomic and Household Motives to Demand Life Insurance: Review and Empirical Evidence from Cyprus. Journal of Business and Society, 19, 37-79.Google Scholar ↗
  46. Sen, S. (2008). An Analysis of Life Insurance Demand Determinants for Selected Asian Economies and India. Working Paper, 36, 1-44.Google Scholar ↗
  47. Swiss Reinsurance Company (2005), World Insurance In 2004: growing premiums and stronger balance sheets, sigma No.2/2005.Google Scholar ↗
  48. Tan, H. B., Wong, M. F., and Law, S. H. (2009).The Effect of Consumer Factors and Firm Efficiency on Malaysian Life Insurance Expenditure. International Journal Business and Society, 10(1), 59-73.Google Scholar ↗
  49. Tapera, J. and Gororo, R. (2013), An Investigation into the Effectiveness of marketing strategies employed by Zimbabwean Insurance companies for creating competitive advantage, Research Journal of Social Science and Management, Vol. 3(8).Google Scholar ↗
  50. Trubey, T. (1999). Life Insurance Suitability. Chicago: Dearborn.Google Scholar ↗
Author details
Dr David Foya
National University of Science and Technology, Bulawayo, Zimbabwe
✉ Corresponding Author
👤 View Profile →
Nkosana Ncube
National University of Science and Technology, Bulawayo, Zimbabwe
👤 View Profile →