MARKET DYNAMICS AND PENETRATION OF MICROINSURANCE IN KENYA. A CASE OF SELECTED INSURANCE COMPANIES.

Abstract

This study mainly evaluated the effect of market dynamics that include product diversification, pricing, information technology adoption, and government intervention on the penetration of microinsurance. From the analyzed data, the study revealed that product diversification, with a mean score of 3.93 and a Beta of 0.328, significantly predicts microinsurance penetration by meeting diverse customer needs and expanding into underserved areas. Pricing strategies, crucial for competitiveness, show a mean score of 4.98 and a Beta of 0.210, indicating their role in balancing affordability and profitability for customer acquisition and retention. Information technology adoption, with mean scores of 4.21 and 4.60 for digital channels and communication respectively, improves accessibility and customer engagement, supported by a Beta of 0.067. Government interventions, evidenced by a Beta of 0.075, enhance affordability and trust through subsidies and regulatory frameworks. Main recommendations include further research on product diversification and dynamic pricing models, supportive policies for transparency and subsidies, practical training on product development and technology integration, and curriculum development for future professionals. The study concludes that strategic focus on these factors will enhance microinsurance penetration, financial inclusion, and sectoral growth.