Factors Affecting Insurance Consumption in Bangladesh: A Study in Dhaka City

Mohammad M Hossain ,Muhammad Jasim Uddin ,Sisheng Xie

doi:10.7176/jesd/10-24-06

Abstract

This study examined factors within insurance institutional framework that affect insurance consumption in Bangladesh. Primary data were collected from 80 insurance consumers judgmentally drawn from 10 insurance companies located in Dhaka city. Data were collected on: accessibility and prompt payment of claims, knowledge of the use and importance of insurance, professional activities by those selling insurance, nature of insurance policy statement and the overall corporate image. The data were analysed using both descriptive and inferential statistics. The socio-economic characteristics of insurance consumers revealed that most of them were literate, mostly public servants, married and were still in their active ages. In accordance with our theoretical framework, our empirical results support the established relationship between insurance consumption and institutional performance. Realising these problems as they affect insurance patronage and development in Bangladesh, the study recommends a general overhauling of insurance institution framework as a way forward for the development of a vibrant insurance market in Bangladesh. Keywords: Factors, Affecting, Insurance, Consumption DOI : 10.7176/JESD/10-24-06 Publication date: December 31 st 2019

Highlights

Since the end of the Second World War, the insurance industry the world over has experienced remarkable growth
The general purpose of this study is to identify and examine those factors within insurance institutional framework that affect insurance consumption in Dhaka city
Multiple regression analysis was used to examine the effect of the hypothesized factors on insurance consumption, while descriptive statistics was used to determine the socio-economic characteristics of insurance consumers

Summary

Introduction

Since the end of the Second World War, the insurance industry the world over has experienced remarkable growth. Concurrent with this growth has been significant changes within the industry. The Bangladesh insurance industry is not unaffected by this general growth malady. The future of insurance industry in Bangladesh appears bright, a number of unresolved problems still exist; of particular interest is the insurance marketing system, which has affected the consumption of insurance products. In Bangladesh, this problem seems to be even more pronounced because of the level of literacy of the Bangladeshi populace. Records reveal that about only 10 percent of the Bangladeshi population have insurance of any sort (Mordi, 1990; Wilson, 2004; and Oworen, 1991)

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Conclusion