The Effect of Premium Rates on Insurance Demand Among Middle-Income Earners in Abuja

This research examines the effect of premium rates on insurance demand among middle-income earners in the Federal Capital Territory, Abuja. Premium pricing represents one of the most direct economic barriers to insurance uptake, particularly in Nigeria where disposable incomes remain constrained despite rising urbanization and employment in the formal sector. Middle-income earners in Abuja, including civil servants, private sector employees, and small business owners, represent a potential growth segment for voluntary insurance products, yet their price sensitivity and demand elasticity are inadequately studied. This study employs a survey design involving 350 middle-income earners selected through stratified sampling across three area councils in the FCT. Questionnaires assess current insurance ownership, willingness to pay across different coverage amounts, knowledge of premium determinants, and responses to hypothetical pricing scenarios across motor, health, and life insurance product categories. Descriptive statistics and ordinary least squares (OLS) regression are applied to estimate the price elasticity of insurance demand for this segment. Preliminary analysis anticipates that demand is moderately price-sensitive, with health insurance exhibiting lower elasticity than motor insurance. The study recommends premium subsidy frameworks and tiered pricing strategies for insurers targeting Abuja's middle-income segment. Keywords: Premium Rates, Insurance Demand, Middle-Income Earners, Abuja, Price Elasticity.