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Research Paper | Financial Engineering | Kenya | Volume 5 Issue 12, December 2016

The Role of Information Asymmetry and Uptake of Insurance Products in Kenya

Charles Okeyo Owuor

Abstract: The Insurance Regulatory Authority in Kenya report indicated that lack of right information showed that individuals were vulnerable to information asymmetry in insurance contracts and limited in making insurance choices. The aim of this study was to assess the relationship between information asymmetries and uptake of insurance products in Kenya. Objectives of the study were to analyze the relationship between moral hazard and uptake of insurance products and to evaluate the relationship between adverse selection and uptake of insurance products in Kenya. Validity in the study was determined using expert opinions while reliability of instruments was determined by computing the Cronbach reliability coefficient from pilot questionnaires. Data analysis was done using descriptive and inferential statistics. Hypothesis testing was done. The tests were done at a significance level of P= 0.05. The study found out that adverse selection and moral hazards significantly influenced insurance uptake.

Keywords: Information asymmetry, moral hazard, adverse selection, insurance uptake, Kenya

Edition: Volume 5 Issue 12, December 2016,

Pages: 333 - 343