Advertisement

Determinant Factors of Insurance Demand by SMEs in Malaysia

  • Junainah Junid
  • Siti Zahrah Buyong
  • Khuzaimah Akasah
Conference paper

Abstract

Malaysian SMEs dominate the market by 90 %. Realising the power of business among SMEs, entrepreneurs need to ensure business continuity by protecting businesses from any occurrence of risk. This research aims to investigate the determinant factors of insurance demand by SME entrepreneurs putting insurance not only as coverage but also as readiness for any disaster faced by businesses in the future. This initiative has led to insurance being considered as a prudent financial risk management for entrepreneurs. A good approach to Look East Policy with respect to SMEs in Japan realises the importance of insurance to protect the business; SMEs in Malaysia should emulate this good practice to secure their business. Some variables identified in this study are premium flexibility, level of income, education and gender of the respondents. Statistical analysis was used in validating the findings and therefore leads to the identification of determinant factors that urge employers to purchase insurance. Appropriate recommendations based on the findings are thrown out to insurance companies, which should be considered for the betterment of offering insurance to micro business entrepreneurs in the future.

Keywords

Abnormal Return Business Owner Insurance Policy Determinant Factor Free Cash Flow 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. 1.
    Brown W, Churchill C (1999) Providing insurance to low-income households: part I: a premier on insurance principles and products, micro enterprise best practices project. DAI/USAID, Bethesda, pp 1–92Google Scholar
  2. 2.
    Matul M (2005) Demand for micro insurance in Georgia: quantitative study results. Presented at the 8th Annual Conference on Microfinance Institution, BucharestGoogle Scholar
  3. 3.
    Guha-Khasnobis B, Ahuja R (2004) Extending formal insurance to the informal economy workers in India. EGDI and UNUWIDER, Parallel Session 3.2Google Scholar
  4. 4.
    Sinha S (2002) Strength in solidarity: insurance for women workers in the informal economy. Self Employed Women’s Association (SEWA), AhmedabadGoogle Scholar
  5. 5.
    Tenkorang DA (2001) Health insurance for the informal sector in Africa: design features, risk protection and resource mobilization. CMH Working Papers Series, Paper No. WG3:1Google Scholar
  6. 6.
    Sebstad J, Cohen M, McGuinness E (2006) Guidelines for market research on the demand for micro insurance. For USAID under the Accelerated Microenterprise Advancement Project (AMAP)Google Scholar
  7. 7.
    Beenstock M, Dickinson G, Khajuria S (1986) The determination of life premiums: an international cross-section analysis 1970–1981. Insur Math Econ 5:261–270CrossRefGoogle Scholar
  8. 8.
    Browne MJ, Kim K (1993) An international analysis of life insurance demand. J Risk Insur 60:616–634CrossRefGoogle Scholar
  9. 9.
    Outreville JF (1996) Life insurance market in developing countries. J Risk Insur 63:263–278CrossRefGoogle Scholar
  10. 10.
    McCord M, Osinde S (2005) Reducing vulnerability: the supply of health insurance in East Africa. J Int Dev 17(3):327–381CrossRefGoogle Scholar
  11. 11.
    Cohen M, Sebstad J (2005) Reducing vulnerability: the demand for microinsurance. J Int Dev 17(3):397–474CrossRefGoogle Scholar
  12. 12.
    Manje L, Churchill C (2002) The demand for risk managing financial services in low-income communities evidence from Zambia. Social Employment Sector, ILO, Geneva, Working Paper No. 31Google Scholar
  13. 13.
    Herrera C, Miranda M (2004) Columna Guatemala. CGAP Working Group on Microinsurance. Good and Bad Practices. Case Study No. 5, DecemberGoogle Scholar
  14. 14.
    McCord M (2008) Visions of the future of micro insurance and thought on getting there, USAID/DAI. Washington, DC, Micro Insurance Note No. 9, pp 1–35Google Scholar

Copyright information

© Springer Japan 2015

Authors and Affiliations

  • Junainah Junid
    • 1
  • Siti Zahrah Buyong
    • 1
  • Khuzaimah Akasah
    • 1
  1. 1.Malaysian Academy of SME and Entrepreneurship DevelopmentUniversity Technology MARAShah AlamMalaysia

Personalised recommendations