Factors affecting premiums through bancassurance: a case study of Jubilee Allianz General Insurance Company Limited, Uganda

Abstract

The main objective of the study was to investigate the factors affecting premiums through bancassurance. We used secondary data which was obtained from Jubilee Allianz General Insurance Company which comprised of 629 policy holders under 13 different banks. The analysis of our data was done using Stata where we used frequency tables, statistical tests like one way ANOVA and multiple linear regression. The results indicated that 504,000,000 was the average sum insured while the average premium through bancassurance was 1,868,686. The policy holders under the fire department took up a percentage of 60.10 and it was the same for the fire class as well. Under the product name, many policy holders took up fire and allied perils while Dfcu bank was seen to be the bank with most clients having policies. The results showed that a unit increase in the sum insured would lead to an increase in the premiums through bancassurance by 0.0013397 where as an improvement in the services provided in the different product departments would lead to a unit increase the premiums through bancassurance. We also see that an increase in the number of bank clients by one person would lead to a unit increase in the premiums through bank assurance. The researcher concluded that the sum insured is the most significant predictor of premiums through bancassurance considering the fact that an expensive item would necessitate higher premiums. Fire and allied perils is the department with the most policy holders because it covers many risks while an increase in the number of policy holders of Orient Bank Limited and Stanbic Bank Uganda Limited by one policy holder would lead to an increase in the premiums through bancassurance. A decrease in the number of policy holders of Finance Trust Bank Limited and Finance Trust Bank Limited by one policy holder would lead to an increase in the premiums through bancassurance. Therefore it is important for the insurance companies to look at the valuation of the different property to be insured so as to charge the right premium through bancassurance and they should also improve the services in the different product departments for example give some discounts so that people are attracted and eventually take up policies and hence a better turnover of the premium through bancassurance