ANALYSIS OF FACTORS AFFECTING GROWTH OF AGRICULTURAL INSURANCE IN ETHIOPIA: THE CASE OF ETHIOPIAN INSURANCE CORPORATION (EIC)

Abstract

This study focuses on the analysis of factor affecting growth of Agricultural Insurance (AI) in the case of Ethiopian Insurance Corporation (EIC). The specific objectives include; to examine the status of Agricultural Insurance coverage in Ethiopia, to assess the major factors affecting the growth of AI business in the case of EIC and to analyze the relationship between the affecting factors and the growth of AI Business in the Case of EIC. The research design is the descriptive and explanatory. The research approach employed is a mixed research approach. The sample size was 273. Data sources were both primary and secondary. The types of data were both qualitative and quantitative data. Descriptive and inferential statistics was employed to analyze the data. The finding of the study were EIC’s doesn’t have enough product alternatives and design. EIC’s has rigid with the policy procedures, terms and conditions. EIC’s has the experience of delay in underwriting issues and claim settlement services are keeping the insured from buying the AI by policies. EIC’s does replies for customer’s critics happened during claim are materialized. The customer has no exposure to attending the EIC advertising on AI business and poor knowledge and awareness about AI covers is keeping the insured from buying the Business policy. EIC’s is the only government insurance institutions which doesn’t allow subsidy for the smallholder famers in order to support and involve Fair-Social responsibility in its side. Based on the finding of the study the researcher recommends that EIC’s should promote or design through its department of Product Development; new product design alternatives, and scope of cover for the growth of AI covers, scale-up, make technology-oriented to alleviate the problems of procedures, delayance & bureaucracies that had been seen in their delivery channels for the growth of AI covers; create awareness by using marketing and promotional strategies for the growth of AI. Develop attractive-marketing strategies of Subsidy to the smallholder Farmers for the growth of AI covers. And, Trust developments that are on the respect of customer’s time, AI Business policy clauses should be written clearly and on the financial capacity of Farmers in order to pay premiums, in getting AI product covers for their Farm sites through incentive mechanisms such as availability to CredDirectorsties for its customers to the growth of AI especially on Commercial Agricultural Insurance (CAI) products in general