Determinants of Micro-Insurance Social Performance in Ethiopia

Abstract

Social performance measurement is important to investors and management in determining future
success of financial institutions, particularly in micro insurance social performance. The aim of
study was to investigate determinants of micro insurance social performance in Ethiopia. The data
that used in this study was panel data and collected from nine micro insurance provider institutions.
The study mainly focused on secondary data from 2009-2017. Besides, in-depth interview with
officials of those institutions was conducted. The collected data was analyzed by using random effect
panel regression model. The result of study shows that volume of capital and market share have
positive significant impact on social performance. Whereas, reinsurance dependency, premium
growth, underwriting risks, inflation and technical provision have negative significant impact on
social performance of micro insurance providers in Ethiopia. The study suggests that insurers
should strengthen their volume of capital and market share to deliver their financial products with
inclusive sense by making campaign on improving their nation’s financial literacy, improving their
technical capacity on actuarial science in collaboration with international partners and national
bank so as to increase their performance with the ultimate goal of improving social wellbeing of the
nation.