dc.description.abstract |
The low adoption of insurance by potential policyholders in developing countries like
Kenya is a cause for concern for insurers, regulators, and other marketing stakehold-
ers. To effectively design targeted marketing strategies to boost insurance adoption, it
is crucial to determine the factors that affect insurance uptake among potential poli-
cyholders. In this study, the 2021 FinAccess Survey, which interviewed sampled indi-
viduals above 16 years in Kenya and machine learning techniques, including Random
Forest, XGBoost, and Logistic Regression, were utilized to uncover the factors driving
insurance uptake and the reasons for the low adoption of insurance among potential
policyholders. Random Forest was the most robust model of the three classifiers based
on Kappa score, recall score, F1 score, precision, and area under the operating charac-
teristic curve (approaching 1). The paper explores eight reasons why people currently
do not have insurance policies. The results indicated that affordability was the primary
driver of uptake with 68.67% of having expressed a desire to possess insurance but are
unable to afford it. The highest level of education being the next most significant fac-
tor. Cultural and religious beliefs and mistrust of insurance providers were found to
have a minimal impact on uptake. These findings imply that offering affordable insur-
ance products and conducting awareness campaigns are critical to increase insurance
adoption |
en_US |