Moderating Impact of Underwriting Risk on the Relationship between Firm Specific Factors and Insurance Financial Inclusion in Kenya

Abstract

Purpose: The study further determined the moderating impact of underwriting risk on the relationship between firm specific factors and insurance financial inclusion in Kenya.

Design/Methodology/Approach: Longitudinal research design was adopted in guiding time series data with target population of 58 insurance firms of which all were censured. Secondary data was obtained for a 10 year period commencing from 2015-2024 being a period which has witnessed the intermittent performance of the insurance industry, a number of regulatory reforms introduced as well as tax related concerns.

Findings: There was a positive statistically significant relationship between firm specific factors and insurance financial inclusion in Kenya (Adj R2 0.4201: p 0.000< 0.05). Underwriting risk had a weak negative significant moderating impact on the relationship between firm specific factors and insurance financial inclusion in Kenya (Adj R2 0.4488: p 0.000< 0.05).

Implications/Originality/Value: The study recommends that insurance firms should design policies that will salvage them from underwriting risk such as a clause of remitting considerable premiums for a given claim this will caution from losses as a result of underwriting risk.