Question

ATTEMPT ALL THE BELOW QUESTIONS

QUESTION ONE
Out of 500 employees of a firm 280 have a life insurance policy, 400 have a medical insurance cover and 200 participate in both programmes
i. What is the probability that a randomly selected employee will be a participant in at least one of the two programmes?
ii. Determine the probability that an employee will be a participant in the life insurance plan given that he/she has a medical insurance coverage?

QUESTION TWO
Explain the reasons for the slow uptake of insurance by Kenyans in general and suggest ways on how this can be improved.

Answer 1

QUESTION ONE :

i .

Employe = 500

Employee have a life insurance policy =280

Proportion of Employee have a life insurance policy P(E) = Employee have a life insurance policy / Employe = 280 / 500 = 2 / 5 = 0.56

Employee have a medical insurance = 400

Proportion of Employee have a Medical insurance policy P(M) = Employee have a Medical insurance policy / Employe = 400 / 500 = 0.8

Employess having Both insurance policy = 200

Proportion of Employee having Both insurance polic P(E ∩ M) = Employess having Both insurance policy / Employe = 200 / 500 = 0.4

probability that a randomly selected employee will be a participant in at least one of the two programmes P (A U M)

P (EUM) = P(E) + P(M) -  P(E ∩ M) = 0.56 + 0.8 - 0.4 = 0.96

Ans : probability that a randomly selected employee will be a participant in at least one of the two programmes 0.96

ii.

the probability that an employee will be a participant in the life insurance plan given that he/she has a medical insurance coverage P ( E | M)

P ( E | M) = P(E ∩ M) / P(M) = 0.4 / 0.8 = 0.5

Ans : probability that an employee will be a participant in the life insurance plan given that he/she has a medical insurance coverage P = 0.5

QUESTION TWO

the reasons for the slow uptake of insurance by Kenyans in general and suggest ways on how this can be improved.

• Low Income level and people - Once per capita income of the country starts improving insurance will be affordable to people.
• Absense of competition on existing player : Lower no of insurance provider making premium costly. As compare to developed nation no of insurance providers are also very less. Opening up the economy for more foreign player will bosst yhe segement.
• Awarness about insurance plan : People are less aware about various insurance and insurance linked savings plan. Require more awarness programme by industry body.