DEPARTMENT OF INSURANCE AND ACTURIAL SCIENCES

FACULTY OF COMMERCE

STUDENT NAME STUDENT # PROGRAMME COHORT

BRADLEY USHE N0171722W RISK MGT & INS PT.2 PARALLEL
TRAVOLTA MUKONZA N0174665P ’’ ’’
HAMILTON MUKUCHA N0173098W ’’ ’’
HUMPHREYS MAKOMBO N0176648W ’’ ’’
HOWARD MADZIVANYIKA N0175618G ’’ ’’
SUKOLUHLE NOKO N0171363B ’’ ’’
ISHEANESU MACHIRI N0174498X ’’ ’’
AUDREY MUZHANYE N0173339E ’’ ’’

SUPERVISOR : MR. T. MAKUYANA

AN ANALYSIS OF THE CULTURAL FACTORS

AFFECTING THE UPTAKE OF INSURANCE PRODUCTS
IN ZIMBABWE.

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 RESEARCH PROJECT PROPOSAL

INTRODUCTION

Insurance uptake has been improving in the market during the last few decades. While the
insurance world is expanding, the variety of available insurance products differ from one country
to the other depending on the tradition, culture and individual preferences among insurance
consumers in each country.

The demand for insurance is said to be the willingness of consumers to purchase insurance at the
given price. In Zimbabwe the demand for insurance has been increasing which shows that there is
improved demand for the insurance products, both long-term (life) and short-term (non-life).
However, the demand for insurance products can be determined by several factors which include
the price, disposable income levels, individual tastes and preferences, culture, employment rates
and so forth just to mention a few.

BACKGROUND

Researchers around the world explore the determinants of insurance consumption and attempt to
find variables that significantly impact both life and non-life insurance purchases. All studies
implicitly assume that the policyholders are making rational decisions, maximizing benefits to
dependants after death and protecting their assets.

However, it may not be appropriate to expect such a high degree of competence and rationality on
the part of the insured when confronted with the purchase of very complex and abstract products.
It may as well be that national culture has a strong impact on insurance purchase decisions.
Humans do not share the same decision making process when faced with economic decisions.
Consumers may respond to insurance solicitations according to their cultural values and not only
on economic rationality.

Culture is defined as the customary beliefs, social forms, and material traits of a racial, religio us,
or social group (Merriam Webster, 2018). In Zimbabwe there are several ethnic groups which
include the Ndebele, Shona, Tonga, Venda, Kalanga, Manyika, Korekore, Nambya, Coloured and

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the white community among others. The culture of the White community is different from that of
the Black people, specifically Zimbabweans. The way White people view and understand
insurance is different from the way Black people view insurance. This is because of differe nt
cultural values and insurance is viewed as mainly Western culture.

As a result of culture, people behave differently towards something in the society. For example, in
India the head is rocked from side to side (the head wobble) to signal ‘Yes’. This is confusing for
Westerners or Europeans who whose this gesture to mean ‘maybe Yes, maybe No’. In Japan, head
nodding does not necessarily mean one agrees with something but it usually means that one hears
you. In Zimbabwe, however, one shakes their head when they are not agreeing with that particular
something.

Values and beliefs of individuals affect their attitudes and behavior towards insurance. Insurance
is purchased because it is a risk transfer mechanism which reduces uncertainty and human nature
needs to reduce uncertainty in life. Therefore, the purchase of insurance will vary from culture to
culture and from one person to another within a given culture.

In Zimbabwe most people value their cultures hence their cultural attitude towards insurance
affects the demand for insurance. An example is that of the Tonga people. The Tonga people do
not go to hospital because their culture does not allow them to. Certain Apostolic sects like the
Johanne Marange do not believe in going to the hospital to seek medical attention as well. This
means that the demand for health insurance in that community will be very low if not none at all.

Therefore, this research explores the different cultures which include religio ns, values and beliefs
of individuals on how they view insurance in Zimbabwe and how it is a determinant of insurance
consumption.

STATEMENT OF THE PROBLEM

The culture within a country determines the demand for insurance in either a negative or positive
way. This is caused by people’s beliefs, religion, opinions and values. Other countries ignore their
cultures and values because they believe that insurance is more important in their lives. Yarri
(1965) proposed the use of life insurance to insure against lifetime uncertainty resulting from the

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mortality risk of individuals. In life insurance premature death of a family head can bring serious
financial consequences for the surviving family members because the breadwinner’s earnings are
lost forever leaving unfulfilled financial obligations such as dependents to support, children to
educate and mortgages to repay. This kind of situation makes people forgo their cultural values
and rely on insurance covers for the future.

However, in Zimbabwe, culture is very important therefore before purchasing insurance people
first of all consider their beliefs. If it does not go along with their cultural values, they do not
purchase those insurance products being sold to them which will cause to the demand of that
particular insurance product to decline.

RESEARCH OBJECTIVES

This research attempts to analyze effects of cultural values and beliefs on the uptake of insurance
products in Zimbabwe. It also studies the situation and expectations of customers in insurance
sales negotiations. Understanding the effect of culture on ethical decision making helps companies
to develop appropriate management and marketing strategies accordingly. The same situation can
be perceived differently in different cultures.

PRIMARY OBJECTIVES

 To analyze the effects of culture on the uptake of insurance products in Zimbabwe.

SECONDARY OBJECTIVES

 To understand what culture is.

 To understand how culture affects the demand for insurance in Zimbabwe.
 To know how people perceive insurance.
 To know how different cultures view insurance.

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RESEARCH QUESTIONS

 What is culture?
 How does culture affect the demand for insurance in Zimbabwe?
 How do people perceive insurance?
 How do different cultures view insurance?

A PROPOSITION OF THE STUDY

Hypothesis

H0- Culture has no effect on the uptake of insurance products in Zimbabwe.

H1- Culture has an effect on the uptake of insurance products in Zimbabwe.

ASSUMPTION OF THE STUDY

The major assumption of the research is that the selected sample should be a true representative of
the population. The researchers shall exercise extreme care in selecting the sample and the
respondents should also be honest in their responses. Also, the other assumption is that all other
factors that are not under review shall be considered to be constant. This is important as it has a
bearing on the findings of the research.

JUSTIFICATION OF THE STUDY

The researchers seek to perform an analysis of the effect that culture has on the uptake of insurance
products in Zimbabwe. The research shall produce results that show whether the effect is negative
or positive. These findings shall be detailed and ought to be helpful to the following:

The researchers

The research will give the researchers a richer understanding of the subject matter under study. It
shall also improve the researchers’ understanding of the insurance market as a whole and also help

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the researchers understand more about the different cultures in Zimbabwe and what the people in
communities think about insurance.

The research shall be submitted to the University in partial fulfilment of the National Univers ity
of Science and Technology (NUST) requirements to attain a Bachelor of Commerce Honours
Degree in Risk Management and Insurance.

The insurance market

The research attempts to correct managerial misconceptions that might be in the market concerning
the use of advanced technology in its operations.

It also gives the players in the insurance industry a broader understanding of different cultures in
Zimbabwe and their effects on the uptake of insurance products. The research also aims at
improving the understanding of how to handle the issues of culture.

The insurance regulator

This includes professional bodies like Insurance and Pensions Commission (IPEC) and the
Insurance Institute of Zimbabwe (IIZ) as well as the government. These bodies should benefit in
the sense that they will get a clearer view of how their subordinates, in this case, the insurance
companies, perceive as well as react to the introduction of change in their current operations.

This helps them to make informed decisions for the future regarding this matter, as well as the
implementation of proper policies.

Other researchers

The research ought to be useful to other researchers who will study this field of research or any
other related field. That is, the study should add value to existing literature and may also be useful
as a reference to other fellow scholars and researchers in this area of study.

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SCOPE OF THE STUDY

The research will be undertaken in Bulawayo and the surrounding areas. It should determine how
important culture is to the Zimbabweans and how culture affects the uptake of insurance products,
whether negatively or positively.

The researchers will visit insurance companies, people in and around Bulawayo with differe nt
cultures and religions so as to know their views and opinions towards insurance. However, in as
much as the research will focus mainly on the Zimbabwean insurance market, reference will be
made to the global insurance market trends.

LIMITATIONS OF THE STUDY

Due to limited resources the researchers might face challenges in the scope of study. These include :

 Time - the time factor is limited as the researchers have other commitments
 Financial resources- as students money is a limited resource affecting the logistical aspect
of the research and information collected.

CONCLUSION
This proposal introduces the study by providing the background of the problem, the problem
statement, giving it direction as to the objectives the researchers want to achieve and how the
researchers intend to achieve them. The literature review section looks at what other scholars have
gathered about and contributed to the topic being researched.

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