Reducing vulnerability: the demand for microinsurance

Cohen, Monique; Sebstad, Jennefer

doi:10.1002/jid.1193

Cited by 82 publications

(47 citation statements)

References 5 publications

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“…A suitable insurance product needs to account for all such factors. A mere downscaling of insurance products known in developed insurance markets will not create sufficient willingness to pay for microinsurance (see Cohen & Sebstad, 2005). The consequence of a lack of trust and other factors reducing the perceived value from a customer's perspective is that willingness to pay would be potentially lower than the technical insurance premium and result in low take-up rates.…”

Section: Interaction Of Premiums Demand and Behaviormentioning

confidence: 98%

Pricing in Microinsurance Markets

Biener¹

2013

World Development

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Section: Interaction Of Premiums Demand and Behaviormentioning

confidence: 98%

Pricing in Microinsurance Markets

Biener¹

2013

World Development

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“…Likewise, governments raise post-disaster capital by diverting funds from other budgeted programs, borrowing money domestically, or taking loans from international financial institutions. While many locally based funding sources, for example, borrowing from neighbours or family, appear to work reasonably well for small localized events (Cohen and Sebstad 2003), they are problematic for catastrophes that affect large regions or many persons at the same time (so-called co-variant or systemic risks). To hedge against co-variant risks, households may purposely locate family members outside of harms way or diversify their livelihoods.…”

Section: Well Insured Group Well Insured Groupmentioning

confidence: 99%

Insurance against Losses from Natural Disasters in Developing Countries

Linnerooth-Bayer

Mechler²,

Hochrainer³

2011

IDRiM Journal

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This paper examines recent experience with insurance and other risk-financing instruments in developing countries, informed by experience in developed countries, to provide insights on the effectiveness of insurance for reducing economic insecurity. Insurance and other risk financing strategies are viewed in the overall context of risk management, including the prevention of losses as well as financing the recovery process through risk pooling and transfer strategies. Specific examples of publicprivate insurance programs for households/businesses, farms and governments are described, including their limitations, especially in light of recent post-Katrina experience in the US. By examining the costs, benefits and risks of public-private risk-financing programs, insights are provided on the effectiveness of insurance as a mechanism for providing economic security to vulnerable communities and governments.

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“…Yet, although informal financing appears to work reasonably well for low-loss events, it is often unreliable and inadequate for catastrophic events. 10 At the public level, it is well known that if governments can spread their post-disaster costs over a large tax base, or other lower-cost financing strategies, they should be risk neutral and not purchase insurance. 11 However, in the aftermath of heavy devastation in their countries, lowincome developing countries may face exhausted tax bases, little reserves and declining credit ratings making external borrowing difficult.…”

Section: Disaster Risk Financing In Developing Countriesmentioning

confidence: 99%

Insurance, Developing Countries and Climate Change

Linnerooth-Bayer

Warner

Bals³

et al. 2009

Geneva Pap Risk Insur Issues Pract

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By providing financial security against droughts, floods, tropical cyclones and other forms of weather extremes, insurance instruments present an opportunity for developing countries in their concurrent efforts to reduce poverty and adapt to climate change. By pricing risk, insurance provides incentives for reducing risks and adapting to climate change; if these premiums are not affordable to the most vulnerable, donors can combine premium support with risk-reduction measures. In this paper, we examine the costs, benefits and risks of public-private (and donor supported) insurance programmes that offer affordable economic security to vulnerable communities and governments. Insurance mechanisms are of particular interest to climate negotiators seeking strategies that help vulnerable countries adapt to increasing severity and frequency of weather disasters, and we examine the case for including insurance mechanisms in a climate adaptation strategy expected to be agreed in Copenhagen in 2009. We present a proposal for this purpose that has been recently put forward by the Munich Climate Insurance Initiative (MCII), which calls for international solidarity for very low probability and high consequence weather-related events (high-risk layer). For middle-layer risks the MCII proposal calls for international support to promote sustainable, affordable and incentivecompatible insurance programmes that serve the poor without crowding out private sector involvement.

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Reducing vulnerability: the demand for microinsurance

Abstract: No Abstract

Cited by 82 publications

References 5 publications

Pricing in Microinsurance Markets

Pricing in Microinsurance Markets

Insurance against Losses from Natural Disasters in Developing Countries

Insurance, Developing Countries and Climate Change

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