PEOPLES KNOWLEDGE ABOUT FIRE INSURANCE

A case study of Owino Market, Kampala district

BY

SERUNJOGI NICHOLUS

BSc. Actuarial Science

14/U/15013/EVE

214003614

A DISSERTATION SUBMITTED TO THE SCHOOL OF STATISTICS AND

PLANNING IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE

AWARD OF A BACHELOR OF SCIENCE DEGREE IN ACTUARIAL SCIENCE OF

MAKERERE UNIVERSITY

SEPTEMBER 2017
 DECLARATION

I SSERUNJOGI NICHOLAS, declare that this work has never been presented to any university,
college or institution for any award.

SignatureDate .

i
 DEDICATION

I dedicate this research to my parents Ms. Nalubwama Teddy for her endless care and tireless
parental and financial support. Thank you.

ii
 ACKNOWLEDGEMENT

I thank the administration of Makerere University, especially the school of statistics and planning
for their inputs which have positively shaped my skills and attitudes to face the challenges in the
world.

Special thanks to my supervisor Dr Namawejje Hellen for her continuous guidance and correction
that helped me to carry out this research successfully.

I thank the participants who were involved in the study willingly for making an invaluable input
to this study. I also express gratitude to my fellow students and friends and to all actuarial students
2017 class who encouraged throughout the course and during the research period. My God bless
them abundantly.

Finally I give thanks to the almighty God for granting me the gift of life, knowledge, faith and
strength to enable me complete this dissertation

iii
 APPROVAL

This is to certify that this study has been successfully completed under my supervision and is now
ready for submission to the academic board with my due approval.

Signed.Date

Dr. Namawejje Hellen

Lecturer
School of statistics and planning,
Makerere University

iv
 TABLE OF CONTENTS

DECLARATION ............................................................................................................................. i

DEDICATION ................................................................................................................................ ii

ACKNOWLEDGEMENT ............................................................................................................. iii

APPROVAL .................................................................................................................................. iv

TABLE OF CONTENTS ................................................................................................................ v

LIST OF TABLES ....................................................................................................................... viii

LIST OF FIGURES ....................................................................................................................... ix

ABSTRACT .................................................................................................................................... x

CHAPTER ONE: INTRODUCTION ............................................................................................. 1

1.0 Introduction ............................................................................................................................... 1

1.1 Background ............................................................................................................................... 1

1.4 Objectives of the study.............................................................................................................. 3

1.5 Research questions .................................................................................................................... 3

1.6 Justification ............................................................................................................................... 4

1.7 Scope of the study ..................................................................................................................... 4

1.8 Significance of the study........................................................................................................... 4

CHAPTER TWO: LITERATURE REVIEW ................................................................................. 5

2.0 Introduction ............................................................................................................................... 5

2.1 Peoples knowledge about fire insurance in Uganda ................................................................ 5

2.2 Peoples awareness about fire insurance................................................................................... 6

2.3 Peoples preference of the different fire insurance policies/products ....................................... 8

2.4 The uptake of fire insurance ..................................................................................................... 9

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2.4 Conclusion .............................................................................................................................. 10

CHAPTER THREE: METHODOLOGY ..................................................................................... 11

3.1 Introduction ............................................................................................................................. 11

3.2 Study Area .............................................................................................................................. 11

3.3 Research Design...................................................................................................................... 11

3.4 Study Population ..................................................................................................................... 12

3.5 Sample size and sample selection ........................................................................................... 12

3.5.1 Sample size .......................................................................................................................... 12

3.5.2 Sample selection: ................................................................................................................. 13

3.6 Data collection instruments..................................................................................................... 13

3.6.1 Quantitative data collection instrument ............................................................................... 13

3.7 Validity and Reliability of the measuring instruments. .......................................................... 13

3.7.1 Reliability. ............................................................................................................................ 13

3.7.2 Validity................................................................................................................................. 13

3.8 Research Procedure ................................................................................................................. 14

3.9 Data analysis ........................................................................................................................... 14

3.9.1 Qualitative data analysis ...................................................................................................... 14

3.9.2 Analysis of Quantitative data ............................................................................................... 14

3.10 Limitations of the Study........................................................................................................ 14

CHAPTER FOUR: RESEARCH FINDINGS ............................................................................. 16

4.1 Introduction ............................................................................................................................. 16

4.2 Socio-demographic information of the respondents ............................................................... 16

4.2.1 Response rate ....................................................................................................................... 16

4.2.2: Gender distribution of respondents ..................................................................................... 16

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4.2.3 Age distribution of respondents ........................................................................................... 17

4.2.4 Marital status of respondents ............................................................................................... 17

4.2.5: Education level of respondents ........................................................................................... 18

4.2.6 Employment of the respondents........................................................................................... 18

4.2.7: Religious affiliation of respondents .................................................................................... 19

4.3 Peoples Awareness on Fire Insurance ................................................................................... 20

4.4 Peoples preference of different fire insurance products ........................................................ 21

4.4.1 Response on whether one is in need of fire insurance ......................................................... 21

4.4.2 Parameter most considered before taking up an insurance policy ....................................... 22

4.4.3 Type of fire insurance preferred .......................................................................................... 23

4.5 Up take rate of fire Insurance.................................................................................................. 24

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS..................... 25

5.1 Introduction ............................................................................................................................. 25

5.2 Summary ................................................................................................................................. 25

5.2.1: People's awareness on fire insurance. ................................................................................. 25

5.2.2: People's preference of the different fire insurance policies/products ................................. 26

5.2.3: Uptake rate of fire insurance. .............................................................................................. 26

5.3: Conclusion ............................................................................................................................. 26

5.4 Recommendation .................................................................................................................... 27

References ..................................................................................................................................... 28

Questionnaire ................................................................................................................................ 29

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 LIST OF TABLES

Table 4.1: Marital status of respondents ...................................................................................... 17

Table 4.2 Religious affiliation of respondents .............................................................................. 19
Table 4. 3: Peoples Awareness on Fire Insurance ...................................................................... 20
Table 4.4: Type of fire insurance preferred .................................................................................. 23
Table 4. 5; Up Take Rate of Fire Insurance ................................................................................. 24

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 LIST OF FIGURES

Figure 4.1: Gender distribution of respondents ........................................................................... 16

Figure 4.2: Age distribution of respondents ................................................................................. 17
Figure 4.3 Education level of respondents ................................................................................... 18
Figure 4.4: Employment of the respondents ................................................................................. 18
Figure 4. 5: Response on whether one is in need of fire insurance .............................................. 21
Figure 4.6: Parameter most considered before taking up fire insurance policy .......................... 22

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 ABSTRACT

The purpose of the study is to determine peoples knowledge about fire insurance with a case study
of Owino market and the objectives of the study were; to find out people's awareness on fire
insurance, to understand people's preference of the different fire insurance policies/products and
to establish the uptake rate of fire insurance (low/high) among the study population. The study
applied quantitative methods of data collection through questionnaires where the questionnaires
were distributed to 96 respondents. The study findings were; for People's awareness on fire
insurance, responses were statistically significant evidenced by a lower P-value of 0.013 meaning
that people are aware of fire insurance in Owino Market, People's preference of the different fire
insurance policies/products was also statistically significant at 5% level of significance evidenced
by a lower P-value of 0.043 showing that people prefer different fire insurance policies and finally
the up take rate was still low evidenced by a statistically insignificant P-value of 0.522. The
conclusion is that people are aware of fire insurance in Owino Market, people prefer different fire
insurance policies and up take rate of fire insurance is still low and the recommendations are; the
researcher recommends the fire insurance bodies to sensitize people about fire insurance in order
to increase the up take rate of fire insurance and the government should provide fire protection
equipments to traders in Owino so as to reduce on its negative effects on the traders businesses.

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 CHAPTER ONE: INTRODUCTION

1.1 Introduction

This chapter covers the background of the study, purpose of the study, objectives of the study,
problem statement, scope, research questions and the significance of the study.

1.2 Background of the study

In 66 A.D. Rome, then the greatest city in the world, burned for five days and five nights, while
the Roman soldiers, who held the whole of the known world in their hands, watched helplessly
whilst their beautiful city was destroyed. In 1666, the Great Fire of London boug.ht the need for
fire insurance (James, 2013).

The Great Fire of London burned for four days and nights. It destroyed 436acres, 13,200 houses,
89 churches (including Saint Pauls Cathedral), the Custom House, the Royal Exchange and
dozens of other public buildings. Only six people were victims in the flames, but hundreds died
from shock and exposure (James, 2013). By 1688, Edward Lloyd was running a coffeehouse in
London. Where, London merchants and bankers met informally to do business.

There financiers who offered insurance contracts to seafarers wrote their names under the specific
amount of risk that they would accept in exchange for a certain payment, called premium(Baker,
2014). These insurers came to be known as underwriters. Finally, in 1769, Lloyds became a formal
group of underwriters that in time grew as an insurance company. The concept of insurance
developed at a fast pace with the growth of British commerce in the 17th and 18th century. (James
2013)

The first stock companies to engage in insurance were chartered in England in the year 1720. In
1735, the first insurance company in the American colonies was founded at Charleston. Later in
the year 1787, fire insurance corporations were formed in New York. Then later in the year 1759,
the life insurance corporation was started in Philadelphia, America (Tuah, 2011). The New York
fire which occurred in the year 1835 was the main reason to draw attention to create reserves to
meet unexpected losses. In the year 1837, Massachusetts was the first state to require companies

1
by law to maintain such reserves. Until the 1950s, most insurance companies in the United States
were restricted to provide only one type of insurance, but then legislation was passed to permit fire
and casualty companies to underwrite several classes of insurance (Agatil, 2006). From this brief
accounting of history we can see how insurance came into existence. Fortunately for us we no
longer have to sell ourselves into slavery if our car is stolen nor we have to be scared of losses due
to absence of reserves. However we can be confident that we will be compensated for our loss.
Without people wanting to secure their investments and great tragedies throughout history we may
not have insurance as we know it today resulting in peace of mind (Mositexom, 2013)

Across the African continent, especially in Sub-Saharan Africa, it was South Africa that was to
take the lead. Cape Town in the early 20th century, took the lead in developing insurance in Africa.
Dutch and British immigrants founded combined fire and life insurance companies in the 1830s.
In the early 20th century the South African state took a unique approach by choosing to do without
social insurance and leaving old age provision to life Insurers. At the time, many countries had
adopted social insurance schemes based on the German model invented by Chancellor Otto von
Bismarck to appease the growing proletarian classes (Twum-Barima, 2014).

Fire insurance was introduced in East Africa by Europeans who settled at the coast in the 19 th
century. These settlers imported the same insurance services to East Africa. Traders across the
East African coast faced a risk of losing their goods due to fire outbreaks. Mainly fire insurance
schemes based on the German model invented by Chancellor Otto von Bismarck where available.
(Twum-Barima, 2014).

Fire insurance is provided by over 16 insurance companies in Uganda. (UIA Annual report 2015)
Some of the policies cover the following hazards; burning of any property, Explosion/implosion
as it may happen to boilers, Aircraft damage caused by pressure waves, Lightening, Riot, strike
and malicious damage, Subsidence and landside including rockslides
Historical and devastative fire outbreaks such as the London fire of 1666, Owino market 2013, and
Greenfield tower London 2017, Buddo Junior School 2008 among others clearly illustrate the need
to understand peoples knowledge about fire Insurance since its a measure used to control losses
caused by fire.

2
1.3 Problem statement

Due to increasing fire outbreaks in Uganda, people should understand the importance and get
knowledge about fire insurance. Many Ugandans lack enough knowledge about the different
benefits of fire insurance. This has led to limited use of insurance in Uganda. The issues
surrounding the customers knowledge about fire insurance are influential to consumers before
purchasing insurance. Many fire outbreaks have occurred in Uganda including Owino Market
(2013), Kiseka market (2015), Sarabed building May (2017), and Buddo junior school girls
dormitory (2008) among others. Many people who suffered these fires had no knowledge of
how they can be compensated or receive their property through insurance hence this has led to
loss of property, deaths, poverty, and increased suffering in Uganda. This study seeks to find
out peoples knowledge about Fire Insurance. Knowledge about fire insurance will help people
understand how they can be protected against losses in case of a fire outbreak.

1.4 Objectives of the study

1.4.1 Main Objective

To investigate peoples knowledge towards fire insurance in Uganda
1.4.2 Specific objectives
i. To find out people's awareness on fire insurance.
ii. To understand people's preference of the different fire insurance policies/products.
iii. To establish the uptake rate of fire insurance (low/high) among the study population.

1.5 Research questions

The following research questions are to be tested in this study

i. Are people aware of fire insurance?

ii. What are peoples preferences of the different fire insurance products?
iii. What is the uptake rate of fire insurance?

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Justification

Uganda Insurers Association has conducted numerous studies about insurance in Uganda over the
years. According to one of the studies (UIA, 2013) many Ugandans lack correct information about
insurance, which affects its uptake rate in the country.

The survey recommended sensitization of the public about the benefits of insurance and
introduction of more tailor made products, which are easy to understand by the public. This study
seeks to find the literature gap on peoples knowledge about fire insurance.

1.7 Scope of the study

The study focused on finding out peoples knowledge about fire insurance. The study will focus
on how people understand fire insurance on parameters such as awareness, price and accessibility.
The study was conducted in Owino market Kampala district in September 2017. Owino market
was chosen because it has faced 4 fire outbreaks in the last 6 years. Furthermore, Owino area is
densely populated and a meeting place to thousands of Ugandans enabling acquisition of reliable
information of peoples knowledge about fire insurance. Additionally Owino market is found in
Kampala, which happens to have the headquarters of all registered Insurance firms and the capital
city of Uganda.
1.8 Significance of the study

The study shall make the following contributions:

i. The study shall contribute knowledge in the area of peoples knowledge about insurance
for firms to identify the nature of consumers so that appropriate marketing strategies
can be developed for the different consumers.

ii. The findings of this research will be beneficial to students and researchers as it will add
to the existing body of knowledge in the field of insurance and act as a spring basis for
further research in the same area and other related areas, in the insurance sector. The
findings of the research will act as a reference to guide Insurance companies in Uganda

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 CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter reviews literature from closely related studies that have been carried out on peoples
knowledge about fire insurance. It includes an assessment of the literature and provides a summary
classification, comparison and evaluation of the study. Review of relevant literature is an analysis
and synthesis of research sources to generate a picture of what is known about a particular situation
and knowledge gaps that exist in the situation. In order to attempt the goal in this study, an attempt
has been made to review and discuss the literature. Review of literature is conducted to generate a
theoretical and scientific knowledge about particulars phenomenon and results in a synthesis of
what is known and unknown about that phenomenon.

2.2 Peoples knowledge about fire insurance in Uganda

According to Twum-Barima, (2014) less than 5% percent of superstores and supermarkets are
covered by fire insurance. This shows most proprietors of these places lack the knowledge of fire
risks. Taking chances, these operators take exception to this insurance. They hold that it is not
worthwhile to spend a large sum of money for such insurance if there is no accident. So many
businesses consider this insurance to be a burden. Apart from these proprietors, many other people
are oblivious to this insurance, believing that it has the least concern with them whether a public
gathering place has been covered by it. Many of them are frequent customers of these places,
knowing little about fire insurance and fire safety (Maina, 2004).

In case a fire in a superstore, which has serious fire danger but has not, been covered by this
insurance, its victims would suffer infringement if the proprietor of the superstore should not pay
an active compensation. Considering these, a strengthened propaganda for fire insurance is of
much necessity (Baranoff, E. Z., & Baranoff, 2004; Brainard, 2008).

5
All kinds of means, such as advertising by media, through service hotline, on streets and display
windows, should be used to promote the publicity so as to improve peoples knowledge of
functions and features of fire insurance. If those gathering places without being covered by it are
not to be patronized by people, their proprietors would have to take out this insurance. Moreover,
data comparison, typical case analysis and other methods can be employed to lead people to this
insurance (Surminski, 2014).

Through vigorous publicity, the percentage of fire insurance will surely be raised. In return, social
contradictions are to be prevented and the government is to be relieved of the burden of after-
disaster salvation, which will promote the transformation of government functions. The research
considered high-income earners for example in superstores and supermarkets (CIAB, 2010).

Baranoff, E. Z., & Baranoff, (2004) did not consider individual responses for example from
hawkers, vendors and customers. This study seeks to find out the uptake level of fire insurance
among people in a public market setting. It will bring out how indigenous people perceive and
understand fire insurance.

This study also seeks to find out peoples knowledge about fire insurance considering all kinds of
people in Owino market for example low and high-income earners. Owino market is characterized
with both kinds of people. This will make it easier to analyze whether peoples knowledge about
fire insurance is dependent on economic status (Ali, Vice, & Branch, 2017).
2.3 Peoples awareness about fire insurance

Mositexom, (2013) discussed the importance of awareness, better and personal servicing to the
customers and emphasizes the importance of providing enough knowledge to people about
insurance. In 1987, the planning wing of the Insurance Cooperation of India, conducted a sample
survey on customers satisfaction.

The objective of study was to find the level of customers satisfaction regarding the product service
in India, particularly on the aspects such as timely dispatch of discharge forms, reminders the
cooperation given by agent or development officer courtesy and sympathy of corporation officials,
receipts of the policy amount, socio-economic status, personality traits of the agents and the

6
performance, the impact of marketing strategies and attitude of the agents towards the organization
performance in Tirunelveli, Tuticorin and Kanyakumari districts (Lippiatt & Weber, 1992).

A sample of 100 respondents was considered using stratified random sampling. The results of the
data show that level of advertising, accessibility to insurance services, where found to be
dependent on the socio-economic status and peoples awareness about insurance. The study was
carried out across sparsely populated areas. In such areas there are less economic activities and
limited information available to people in form of adverts, boards, television shows about
insurance (Ivan, Duan, & Tatjana, 2015).

This study seeks to find out whether people are indeed aware of the different benefits of fire
insurance in an urban setting. Owino market provides a very conducive environment for a
researcher seeking to find out peoples knowledge about fire insurance since it is a meeting point
to many people of different races, education levels and ages.

Gillott, (1988) examined the role of advertising and likeability in predicting the performance of
ad campaigns. The likeability level varied from high to low from one product to another. The
findings of the study were based on an experimental design and are proving whether advertising
likeability causes purchase. Four different ads were used in the study and for each ad the ad
likeability in the copy test significantly predicted brand attitude but failed to predict campaign-
induced brand attitude in the post test. The imperative for marketers is to create advertisements
that are believable and contain relevant information about the product.

The messages in the advertisements should focus on benefits and attributes with the required
amount of creativity in it to get maximum results. They contend to use humor in advertising to
capture the attention of prospective customers and emphasize the need for carrying the message of
Fire insurance to the people, without creating unpleasant feelings. John advocates protecting of the
copy before its advertised. He states that the insurance company can only sell its products when
people have enough favorable knowledge about its services.

7
In Kampala district information about insurance is availed to people on boards, radios Televisions,
Text messages and Newspapers. More people in areas such as Owino market are however
increasing suffering with losses from fire outbreaks. This study seeks to find out how this
information available influences peoples awareness about fire insurance.

2.4 Peoples preference of the different fire insurance policies/products

(Maina, (2004) analyses the demographic variables and the appraisal of insurance with a case
analysis, pertaining to assistance products. Additional features to traditional products are referred
to as assistance products. A consumer survey was conducted to find the demographic
characteristics and the related assistance products. It also analyses the consumers judgments
towards new class of fire insurance products. A sample of 200 respondents was considered using
stratified random sampling.

The study reveals that variables used in the survey are different and there is a weak relationship
between consumers judgments and class of products as demographic variables are not performing
as expected, it seems advisable to focus on alternate factors. Alternative factors mainly influence
peoples preference about fire insurance products (Nanyama, 2016). This study seeks to find out
peoples preferences about the different fire insurance products on the basis of coverage, quality,
reliability, claims management, accessibility to the insurance company and cost of insurance.

Twum-Barima, (2014) emphasizes that identifying the right product is the first step towards
attempting to provide knowledge to people about fire insurance products. He adds that although it
sounds very simple, it is hard to accomplish, considering the numerous factors that go into a sale.
He concludes ethics in insurance selling has always been an often debated subject among insurance
people. The fact that the subject is often talked about is a sure enough indication of its importance
and the concern that insurance selling should be ethical.

Existence of ethical sales agents and marketers will boost insurance sells and generally peoples
knowledge about ire insurance, the quality of a service perceived by customers will differ

8
depending on what strategy the company chooses to deliver and promote the service. The service
quality model by David holds that the quality of a service, as it is perceived by the customer, should
be easily noticeable by the former.

The perception of fire insurance products is mainly based on what they know. However in Urban
areas like Owino market people are continuing to suffer from losses due to fire outbreaks. This
study seeks to find out peoples perception about fire insurance products in consideration of service
quality, reliability, accessibility to the insurance company, cost of insurance and claims
management.

2.4 The uptake of fire insurance

Tuah, (2011) focused on the context of global scenario, one country cannot remain isolated. They
illustrated that peoples knowledge about insurance generally depends on the size of the sector. An
increase in the size of the insurance sector encourages extensive awareness by people.

The uptake of fire insurance generally depends on the level of economic activities. More fire
insurance products are sold during an economic boom compared to recession times. There exists
bigger variances in the uptake of different insurance products. For example more Motor insurance
products are sold in Uganda, compared to life and medical businesses. This study seeks to find out
the uptake of fire insurance in comparison to other insurance products. It will depict the choice of
Ugandans on either protection or investment.

Agatil, (2006) tried to find out the competitiveness of public fire insurance in view of entry of new
players and carried out a SWOT analysis to suggest some strategies. The objective of the study
was to help the public sector insurance giant to increase the market share, to help the Insurance
Cooperation to retain old customers, and to attract new customers. A sample of 300 respondents
was considered using stratified random sampling. The study also emphasizes on customer
satisfaction and quality services. The methodology applied was an open-ended interview with the
customer to find out the uptake of fire insurance.

9
The study targeted customers in Dhanabad and its surrounding areas selected through convenience
sampling to collect information on sum assured and annual premium paid. The new players will
have to focus on the new and emerging customer requirements. The existing players will also have
to take care of customer specific issue and requirements. As a matter of fact, custom-based
products will have to be designed so as to Suit specific customer needs. New products have to be
designed for large corporate groups.

The existing and new players will have to devise different strategies to retain and enhance their
market share. This would be done by bringing in new practice, setting new services standards and
creating new benchmarks. However, the study ignored the possibility of factors such as claims
management, accessibility and social responsibility of the public insurance company in
comparison with other players. This study will also consider both qualitative and quantitative
analysis of the results from the survey. This study seeks to find out whether such factors influence
the uptake of fire insurance. Emphasis will be on fire insurance in general not individual insurance
companies.

2.4 Conclusion

The above review shows that most of the studies concerning peoples knowledge about insurance
have been based on data from insurance companies. Selection of a few units for study, limited
samples, ignorance of customer behavior, lack of due attention to agent and development officers
were the limitation of the studies. With this background, the present study is an attempt to fill in
the research gap in these areas. There is a literature gap about peoples knowledge specifically
about fire insurance. The study was specific to fire insurance with its coverage of people around
Owino market and a sample of 96 respondents. An attempt has been made to study the Policyholder
behavior, customer representative activities and recent concept of marketing management.

10
 CHAPTER THREE: METHODOLOGY

3.1 Introduction

This chapter focuses on the methods that were used to collect data and its analysis. The chapter
greatly concerns the research design, study population, sample size, sampling selection, data
collection procedures and instruments, data processing, presentation, analysis and interpretation,
validity and reliability of the data that was collected and the limitations encountered during the
study.

3.2 Study Area

The research was conducted in Kampalas Owino Market. The area is extremely crowded, with a
lot of competition in the struggle to get customers. The market has permanent and temporally
stores where traders store their goods. Such stores are at very high risk of burning due to activities
within the market such as metal melting, fish smoking and cooking.

3.3 Research Design

The study was conducted using a combination of research designs particularly case study and
cross-sectional. Case study was used because the study focused on peoples knowledge about fire
insurance with a case study of Owino Market and cross-sectional because study that analyze data
collected from a population, or a representative subset, at a specific point in time; quantitative
research design were used as a tool for primary investigation through questionnaires to depict the
respondents awareness on fire insurance, respondents preferences of different fire insurance
policies/products and the up take rate of fire insurance in Owino market, qualitative research
design will also be used to supplement the quantitative data collected and it was done through
documentary analysis inform of published articles and journals.

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3.4 Study Population

The target populations for the study were traders in Owino market and these had operated in Owino
Market for at least the last five years and above. The reason for setting five years is that these
respondents must have experienced fore outbreak and had the knowledge about the study

3.5 Sample size and sample selection

3.5.1 Sample size

The sample is part of the target population that has been procedurally selected. A sample size of
96 respondents particularly the traders was used. This sample size was calculated by Kish Leslies
(1965) formula used to calculate the sample size of unknown population since the population size
of Owino market is not known as shown below;
2
n= 2

Where
n - Total sample size selected.
Z- Statistic of normal distribution
Therefore, Z0.025=1.96 (obtained from normal distribution table), (1.96)2 =3.8416
e- Maximum probability error which the researcher is likely to commit, this was taken to be 10%.
P= 0.5 and is the proportion of respondents who were willing to participate in the study. Therefore
q = 0.5. Since p+q=1 (respondents has equal chances of accepting or refusing to participate in the
study)
By substituting these values in the equation above.
(1.96)2 0.50.5
n= = n=96.04, 96 Respondents
(0.1)2

Therefore the sample size comprised of 96 respondents.

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3.5.2 Sample selection:

The researcher will not influence the composition of the required sample of 96; sample was
therefore be obtained by chance using simple random sampling. The respondents had equal chance
of being selected.

3.6 Data collection instruments

3.6.1 Quantitative data collection instrument

Questionnaires were administered by the researcher to collect quantitative data regarding the study
objectives.

3.7 Validity and Reliability of the measuring instruments.

3.7.1 Reliability.

The reliability of the questionnaire was established by carrying out a pilot study. The extent to
which results are consistent over time and an accurate representation of the total population under
study is referred to as reliability and if the results of a study can be reproduced under a similar
methodology, then the research instrument is considered to be reliable, here the inter-rater
reliability will be used to assess the degree to which different respondents give consistent estimates
of the same phenomenon. Inter-rater was used because our respondents were human. People are
notorious for their inconsistency. We are easily distractible. We get tired of doing repetitive tasks.
We daydream. We misinterpret.

3.7.2 Validity

Validity was established in order to check or provide guidance on the data collection tools. Validity
determines whether the research truly measures that which it was intended to measure or how
truthful the research results are. In this research content validity index was used. Content validity
means the degree to which an instrument has an appropriate sample of items for the construct being
measured.

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3.8 Research Procedure

The researcher was obtained an introductory letter from the School of Statistics and Planning
College of Business and Management Sciences, Makerere University; which will be presented to
LC1 chairperson of Owino Market and the letter that requests for permission to carry out research
in the market. Appointments were made by selecting the respondents to allow them establish their
own convenient time of participating in the study exercise.

3.9 Data analysis

3.9.1 Qualitative data analysis

The qualitative data was analyzed using thematic analysis methods. The themes were selected from
prior set research questions. This method enabled the researcher to provide a chronological flow
of the research findings, interpretations and conclusions. This was helpful because it captured
peoples reality and experiences about knowledge of respondents on fire insurance.

3.9.2 Analysis of Quantitative data

The collected data was analyzed using descriptive statistics tools such as mean, frequencies,
percentages and chi-square, presentation of tables and figures will be done on three different
objectives stated in chapter one such as; the respondents awareness on fire insurance, respondents
preferences of different fire insurance policies/products and the up take rate of fire insurance in
Owino market and the chi-square statistics were used to make conclusions.

3.10 Limitations of the Study

Sensitivity of the chosen study topic; the mention of fire outbreaks raises heart beats among many
people. This cannot be different from the people in Owino market. Fire is a fright to many people
almost fearing that may be the researcher burnt their property. However, this fear was surpassed
since there is no questionnaire inquiring directly about the cause of fire outbreaks.
Privacy and the environment; as much as the researchers provided the most secure environment
where people could freely share their experiences, this is not easy in the Owino amorphous

14
environment. Sitting in a temporally structured shop cannot guarantee any privacy as they are so
close to each other. Even interviews held outside in shop stalls were interpreted by those passing
by or ear dropping curious to find out what is going on. As such, a lot of time and efforts was spent
trying to find the best suitable environment where people would be comfortable to talk.

15
 CHAPTER FOUR: ANALYSIS AND PRESENTATION OF FINDINGS

4.1 Introduction

This chapter presents the analysis and presentation of the findings in accordance to the stated
objectives and research questions. The purpose of the study was to determine peoples knowledge
about fire insurance with a case study of Owino market and the objectives of the study were; to
find out people's awareness on fire insurance, to understand people's preference of the different
fire insurance policies/products and to establish the uptake rate of fire insurance (low/high) among
the study population.
4.2 Socio-demographic information of the respondents

This section presents the descriptive analysis of the respondents socio-demographic

characteristics. It gives the frequency distributions on their age, education level, employment,
religion and marital status among other variables. The results are represented below.

4.2.1 Response rate

A total of 96 questionnaires were distributed among the target sample population in the field
however 90 of them were filled and returned represented 94% of the response rate.

4.2.2: Gender distribution of respondents

49% 51% male

female

Figure 4.1: Gender distribution of respondents

16
As shown in figure 4.1 above, majority of the respondents were males (51%) and the least were
females (49%) and this indicates that there were more males than females who participated in the
study.
4.2.3 Age distribution of respondents

35

30

25

20

15

10

0
20&below 21-40 41-50 51&above

Figure 4.2: age distribution of respondents

From figure 4.2 above, majority of the respondents (31%) were aged 41-50 followed by those
who were aged 21-40 (28%), then those aged 20&below (22%) and then the least were aged
51&above (20%).
4.2.4 Marital status of respondents

Table 4.1: marital status of respondents

Marital status Frequency Percent

single 43 62.3
married 29 30.2
divorced 13 13.5
widowed 11 11.4
Total 96 100.0

17
From table 4.1 above, majority of the respondents were single (62.3%) followed by those who
were married (30.2%), then those who divorced (13.5%) and then the least were widowed (11.4%).

4.2.5: Education level of respondents

8% 18% none
15%
primary

12% 22% secondary

diploma
25% bachelors
masters

Figure 4.3 Education level of respondents

From the figure 4.3 above, it was evidenced that majority of the study participants were those
who had attained secondary education (25%) followed by those who had primary level (22%),
then those who had no education (18%), then those had obtained a bachelors degree (15%), then
those who had a diploma (12%) and the least had a masters degree.
4.2.6 Employment of the respondents

60

50

40

30

20

10

0
unemployed self-employed employed others (specify)

Figure 4.4: Employment of the respondents

18
From figure 4.4 above, it is shown that majority of the respondents (51%) were unemployed
followed by those who were self-employed (17%), then who were employed by the government
(16%) and the least were others (14%) like those on contracts.
4.2.7: Religious affiliation of respondents

Table 4.2 Religious affiliation of respondents

Religion Frequency Percent

catholic 42 43.8
protestant 21 22.8
Muslim 20 20.8
Pentecostal 7 7.2
others(specify) 6 6.2
Total 96 100.0

As shown in table 4.2 above, majority of the respondents (43.8%) were Catholics, followed by
those who were protestants (22.8%), then those who were Muslims (20.8%), then those who were
Pentecostals (7.2%) and the least were other (6.2%) like the born again and the orthodox.

19
4.3 Peoples Awareness on Fire Insurance

Table 4. 3: Peoples Awareness on Fire Insurance

Way of getting 2 P-value

insurance
information Have you ever heard of fire
insurance?
yes no Total
radio 37 9 46
80.4% 19.6% 100.0% 12.593 0.013
television 11 14 25
44.0% 56.0% 100.0%
bill boards 5 6 11
45.5% 54.5% 100.0%
agents 4 5 9
44.4% 55.6% 100.0%
others (specify) 3 2 5
60.0% 40.0% 100.0%

From table 4.2 above, 80.4% of the respondents who were aware of fire insurance used radio to
get the information and 19.6% who have never heard about fire insurance did not use radio as a
method of getting information about fire insurance.
For 44.0% of the respondents who knew about fire insurance gets information through television
and 56.0% who know fore insurance do not use television to get information about fire insurance.
Considering those who use billboards to get information about fire insurance, 45.5% have ever
heard about fire insurance and 54.5% who use billboards have never heard about fire insurance.
For 44.4% of the respondents who have ever heard about fire insurance have use agents to get
information about fire insurance and 55.6% who use agents to get information had never heard
about fire insurance.
Respondents who use other ways of getting information about fire insurance (60.0%) have ever
heard about fire insurance and 40% have never heard about fire insurance and performing cross
tabulation the overall responses were significant evidenced by a lower P-value of 0.013 concluding
that people are aware of fire insurance in Owino Market however this disagrees with what Twum-
Barima, (2014) found out that less than 5% percent of superstores and supermarkets are covered

20
by fire insurance. This shows most proprietors of these places lack the knowledge of fire risks.
Taking chances, these operators take exception to this insurance and according to (Surminski,
2014), the means, such as advertising by media, through service hotline, on streets and display
windows, should be used to promote the publicity so as to improve peoples knowledge of
functions and features of fire insurance were identified as ways how people get information on fire
insures which disregards the findings. If those gathering places without being covered by it are not
to be patronized by people, their proprietors would have to take out this insurance. Moreover, data
comparison, typical case analysis and other methods can be employed to lead people to this
insurance

4.4 PEOPLES PREFERNCE OF DIFFERENT FIRE INSURANCE PRODUCTS

4.4.1 Response on whether one is in need of fire insurance

36%

yes
64%
no

Figure 4. 5: Response on whether one is in need of fire insurance

As shown in figure 4.4 above, majority of the respondents 64% reported that they need fire
insurance and a few 36% reported that they do not need fire insurance.

21
4.4.2 Parameter most considered before taking up an insurance policy

30

25

20

15

10

0
sum insured cost of the policy terms bonus and accessibility company
premuin interest image

Figure 4.6: Parameter most considered before taking up fire insurance policy
As shown in figure 4.5 above, a majority of respondents considers the cost of the premium 23.9%
followed by those who considers sum insured 21.8%, then those who considers bonus and interest
on premiums 19.7%, then those considering the policy terms 17.7%, then those considering
accessibility 11.5% and the least considers the company image offering the insurance policy 5.2%
and all the above disagrees with Twum-Barima, (2014) emphasizes that identifying the right
product is the first step towards attempting to provide knowledge to people about fire insurance
products.

22
4.4.3 Type of fire insurance preferred

Table 4.4: Type of fire insurance preferred

what type of insurance Are you in need of fire 2 P-value

do you most prefer insurance?

yes no Total
valued policy 11 13 24
45.8% 54.2% 100.0%
specific policy 12 5 17 8.914 0.043
70.6% 29.4% 100.0%
replacement policy 10 9 19
52.6% 47.4% 100.0%
consequential loss policy 18 7 25
72.0% 28.0% 100.0%
comprehensive policy 10 1 11
90.9% 9.1% 100.0%

From table 4.3 above, 45.8% of the respondents who were in need of fire insurance preferred
valued policy and 54.2% of the respondents who were not in need of fire insurance most preferred
the valued policy.

For those who preferred specific policy, 70.6% were in need of fire insurance and 29.4% who were
not in need of fire insurance most preferred specific policy.

Those who most preferred replacement policy, 52.6% were in need of fire insurance and 47.4%
who preferred replacement policy were not in need of fire insurance.

For those who preferred consequential policy, 72% were in need of fire insurance and 28% who
preferred consequential policy were not in need of fire insurance and finally 90.9% of the
respondents who most preferred comprehensive policy were in need of fire insurance and 9.1%
were not in need of fire insurance and the overall responses were statistically significant at 5%
level of significance evidenced by a lower P-value of 0.043.

23
4.5 UP TAKE RATE OF FIRE INSURANCE

Table 4. 5; Up Take Rate of Fire Insurance

How many times 2 P-value

have you taken fire Have you ever taken fire insurance
insurance? policy?
yes no Total
<2 times 31 19 50
62.0% 38.0% 100.0% 1.225 0.522
2-4 times 24 12 36
66.7% 33.3% 100.0%
5 times and above 8 2 10
80.0% 20.0% 100.0%

As indicated in table 4.4 above, 62% of the respondents who have ever taken fire insurance have
taken it for <2 times, 66.7% have taken insurance for 2-4 times and 80% have taken it for 5 times
and above, however the overall responses were statistically insignificant at 5% level of
significance evidenced by a higher P-value of 0.522 meaning that the up take rate of fire insurance
is still low in Owino market and this disagrees with what Tuah, (2011) who focused on the context
of global scenario where one country cannot remain isolated. They illustrated that peoples
knowledge about insurance generally depends on the size of the sector. An increase in the size of
the insurance sector encourages extensive awareness by people. The uptake of fire insurance
generally depends on the level of economic activities. More fire insurance products are sold during
an economic boom compared to recession times

24
 CHAPTER FIVE: SUMMARY OF THE FINDINGS, CONCLUSION AND
RECOMMENDATIONS

5.1 Introduction

This chapter gives a summary, conclusion and recommendations of the main findings in relation
to the stated objectives and results obtained from chapter four.

5.2 Summary

The summary of the results is in line with the stated specific objectives of this study which are;
i) To find out people's awareness on fire insurance.
ii) To understand people's preference of the different fire insurance policies/products.
iii) To establish the uptake rate of fire insurance (low/high) among the study population
5.2.1: People's awareness on fire insurance.

From table 4.2 above in chapter four, 80.4% of the respondents who were aware of fire insurance
used radio to get the information and 19.6% who have never heard about fire insurance did not use
radio as a method of getting information about fire insurance. For 44.0% of the respondents who
knew about fire insurance gets information through television and 56.0% who know fore insurance
do not use television to get information about fire insurance. Considering those who use billboards
to get information about fire insurance, 45.5% have ever heard about fire insurance and 54.5%
who use billboards have never heard about fire insurance. For 44.4% of the respondents who have
ever heard about fire insurance have use agents to get information about fire insurance and 55.6%
who use agents to get information had never heard about fire insurance and respondents who use
other ways of getting information about fire insurance (60.0%) have ever heard about fire
insurance and 40% have never heard about fire insurance and performing cross tabulation the
overall responses were significant evidenced by a lower P-value of 0.013 concluding that people
are aware of fire insurance in Owino Market.

25
5.2.2: People's preference of the different fire insurance policies/products

As indicated in chapter four table 4.3, 45.8% of the respondents who were in need of fire insurance
preferred valued policy and 54.2% of the respondents who were not in need of fire insurance most
preferred the valued policy. For those who preferred specific policy, 70.6% were in need of fire
insurance and 29.4% who were not in need of fire insurance most preferred specific policy. Those
who most preferred replacement policy, 52.6% were in need of fire insurance and 47.4% who
preferred replacement policy were not in need of fire insurance and those who preferred
consequential policy, 72% were in need of fire insurance and 28% who preferred consequential
policy were not in need of fire insurance and finally 90.9% of the respondents who most preferred
comprehensive policy were in need of fire insurance and 9.1% were not in need of fire insurance
and the overall responses were statistically significant at 5% level of significance evidenced by a
lower P-value of 0.043.

5.2.3: Uptake rate of fire insurance.

Results in chapter four table 4.4 above, 62% of the respondents who have ever taken fire insurance
have taken it for <2 times, 66.7% have taken insurance for 2-4 times and 80% have taken it for 5
times and above, however the overall responses were statistically insignificant at 5% level of
significance evidenced by a higher P-value of 0.522 meaning that the up take rate of fire insurance
is still low in Owino market.

5.3: Conclusion

For People's awareness on fire insurance, since on cross tabulation the overall responses were
statistically significant evidenced by a lower P-value of 0.013 concludes that people are aware of
fire insurance in Owino Market, People's preference of the different fire insurance
policies/products was also statistically significant at 5% level of significance evidenced by a lower
P-value of 0.043 concluding that people prefer different fire insurance policies and finally the up
take rate is still low evidenced a statistically insignificant P-value of 0.522.

26
5.4 Recommendation

1. The researcher recommends the fire insurance bodies to sensitize people about fire
insurance in order to increase the up take rate of fire insurance.
2. The government should provide fire protection equipments to traders in Owino so as to
reduce on its negative effects on the traders businesses.

27
 References

Ali, Z., Vice, K., & Branch, L. C. (2017). Importance of Insurance in Our Economy, 1819.

Baker. (2014). Module 4 Practice of General Insurance, 117. Retrieved from

http://www.nios.ac.in/media/documents/VocInsServices/m4-1f.pdf
Baranoff, E. Z., & Baranoff, E. Z. (2004). Risk Management and Insurance. Journal of Risk and
Insurance, 78(2), 389411. https://doi.org/10.1111/j.1539-6975.2010.01393.x

Brainard, L. (2008). What is the role of insurance in economic development? Zurich Financial
Service International Advisory Council, 110. Retrieved from
http://www.draudimas.com/allpics/What_is_the_role_of_economic_developement.pdf

CIAB. (2010). The role of insurance intermediaries, 19. Retrieved from

https://www.ciab.com/uploadedfiles/resources/roleofinsint.pdf
Inn, S., Society, A., & Gillott, N. R. (1988). Commercial fire insurance, (January).

Ivan, P., Duan, C., & Tatjana, P. (2015). Role of Insurance Companies in Financial Market, (1),
94102.

James, O. N. (2013). Influence of fire disasters on mitigation and preparedness in commercial

premises in Kenya. University of Nairobi School, 84.
Lippiatt, B. C., & Weber, S. F. (1992). Managing the Economic Risks of Fire, (March).
Maina, G. S. (2004). A survey of fire rating practices in the Kenya Insurance Market.

Mositexom. (2013). Module 4 Practice of General Insurance, 117. Retrieved from

http://www.nios.ac.in/media/documents/VocInsServices/m4-1f.pdf
Nanyama, J. (2016). THE ROLE OF AN INSURANCE.
Surminski, S. (2014). The Role of Insurance in Reducing Direct Risk - The Case of Flood
Insurance. International Review of Environmental and Resource Economics, 7(34), 241
278. https://doi.org/10.1561/101.00000062
Tuah, Y. (2011). Transforming the insurance industry, 2011.
Twum-Barima, L. M. (2014). An Assessment of the Awareness of Fire Insurance in the Informal
Sector: A Case Study of Kumasi Central Market in Ghana. International Journal of
Humanities Social Sciences and Education, 1(8), 4147.

28
 Questionnaire

A study of Peoples Knowledge about fire insurance with special reference to Owino
market, Kampala district

Dear respondent, iam Sserunjogi Nicholas a student at Makerere University I request you to
participate in the study voluntarily and this study is only for academic purposes. The questionnaire
is aimed at understanding your knowledge about fire insurance. Your response will be handled
with strict confidentiality and used for only academic purposes. Thank you for spending your
valuable time to fill this questionnaire.

SECTION A: SOCIO-DEMOGRAPHIC CHARACTERISTICS OF RESPONDENTS

SECTION A: BIOGRAPHIC DATA OF THE RESPONDENT

1 Gender (please tick)
Male Female
2 Age (please tick)
20-30 31-40 41-above
3 Marital status (please tick)
Single Married Divorced
Widow

4 What is your highest level of education (please tick)

None Primary Secondary
Diploma Bachelors Masters

Others (specify)
5 What do you do as means of living (occupation)?
Unemployed Self-employed Employed
Others (specify)
Religious affiliation (please tick)

Catholic Protestant Muslim

Pentecostal
Others (specify)

29
SECTION B: PEOPLES AWARENESS ON FIRE INSURANCE

1. Have you ever heard of fire insurance?

a)Yes b) No

2. What is the most convenient means of getting information about fire insurance to you?

a) Radio b) Television c)Billboards d) Agent(s)

e) Seminars f) Others Specify .

SECTION C: PEOPLES PREFERNCE OF DIFFERENT FIRE INSURANCE PRODUCTS

1. Are you in need of Fire Insurance?

a) Yes b) No

2. What parameters do you most consider before buying a fire Insurance product?
(Tick according to your preference)
a) Sum assured
b) premium
c) Policy Term
d) Bonus and Interest
e) accessibility
f) Company Image

3. What type of fire Insurance do you prefer?

a) Valued Policy
b) Specific Policy
c) Replacement Policy
d) Consequential Loss Policy
e) Comprehensive Policy

SECTION D: UP TAKE RATE OF FIRE INSURANCE

4. Have you ever taken any fire insurance policy/product?
a) Yes b) No

30
5. How many times have you taken fire insurance product
a) Less than 2 times b) 2-4 times c) five times and above
6. Any other comment?

..

Thank you

31