“Donors and Microinsurance,” published by the Microinsurance Network, 2012, 31 pages, available at: http://www.microinsurancenetwork.org/publication/fichier/MIN_Donor_study_2012.pdf
This publication summarizes the findings of a study performed to determine activities and strategic plans of microinsurance donors and the determining factors behind the significant increase in donor involvement in recent years. The study found that two thirds of microinsurance donors began participating after 2006 and most participation is a result of a desire to increase inclusion with the aim of poverty alleviation. The majority of organizations that participated in the study had in-house expertise in microinsurance, mainly in field activities such as product design and in areas such as policy, legislation and supervision. Most organizations decide where to donate based on an institutional geographic mandate, and there is a strong focus on Africa and Latin America. Involvement of donors is expected to continue increasing over the coming years. The study concludes that there is a great need for collaboration among donors to compare experiences to maximize effectiveness.
“Health Insurance Participation: Evidence from Kenya;” by Stefan Dercon, et al; published by the Microinsurance Innovation Facility, European Research Development Network and International Labour Office; January 2012; 15 pages; available at: http://www.microfinancegateway.org/p/site/m/template.rc/1.1.14810/
This document discusses the results of a field experiment offering health insurance to tea farmers in the district of Nyeri, Kenya, who belonged to the Wananchi Savings and Credit Cooperative Society. The farmers selected were not among the poorest citizens in Kenya, and all had some prior exposure to insurance. The study involved 150 tea collection centers, which were divided into four groups: a control group to which no insurance was offered, a basic marketing group that was given information about the product, an education group that participated in a ten-week financial literacy course before receiving information on the product and a peer-referral group that gave Wananchi members the chance to reduce the cost of their membership by recruiting peers. Two thirds or participants were given vouchers good for 10 or 20 percent of the premium costs and one third got no voucher. The study found that individuals were much more likely to purchase the product if they received a voucher for 10 or 20 percent off the premium cost. Giving information on the product and offering a financial literacy course had no effect on the demand for insurance. However, those who did purchase the product generally had had more experience with insurance in the past. The final conclusion of the study is that rising prices are likely to restrict access to insurance even outside of the poorest parts of the financial sector.
“Risk Preferences and Demand for Insurance Under Price Uncertainty: An Experimental Approach for Cocoa Farmers in Cote D’Ivoire;” by Euphrasie Kouame and Aka Narcisse Komenan; published by the Microinsurance Innovation Facility, European Development Research Network and International Labour Office; January 2012; 30 pages; available at: http://www.ilo.org/public/english/employment/mifacility/download/repaper13.pdf
This document considers risk aversion and willingness-to-pay for low-cost insurance among cocoa farmers in Cote d’Ivoire. The study found that 45 percent of farmers have a severe to extreme level of risk aversion inhibiting their decision to buy insurance. It also reveals a high interest in minimum price insurance and that demand for insurance is affected by many variables such as household size, farming experience and value of livestock. Finally, the study characterizes individual willingness-to-pay as “very low;” the average household is willing to pay between 8.5 and 13 percent of the option value they receive as a premium. The publication concludes with the recommendation to increase community education to decrease risk aversion and give farmers the tools to understand agricultural insurance and its role in dealing with risks.
By Charlotte Newman, Research Associate
Sources and Additional Resources:
“Donors and Microinsurance,” http://www.microinsurancenetwork.org/publication/fichier/MIN_Donor_study_2012.pdf
“Health Insurance Participation: Evidence from Kenya,” http://www.microfinancegateway.org/p/site/m/template.rc/1.1.14810/
“Risk Preferences and Demand for Insurance Under Price Uncertainty: An Experimental Approach for Cocao Farmers in Cote D’Ivoire,” http://www.ilo.org/public/english/employment/mifacility/download/repaper13.pdf
MicroCapital.org story, March 26, 2012, “MICROFINANCE PUBLICATION ROUND-UP: MIX Snapshot of Microfinance in Asia, How Social Entrepreneurs Spread Innovation, Impact of Thai Million Baht Village Fund,” https://www.microcapital.org/microfinance-publication-round-up-mix-snapshot-of-microfinance-in-asia-how-social-entrepreneurs-spread-innovation-impact-of-thai-million-baht-village-fund/
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