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Do you want some cash-back? Assessing the demand for a no-claim rebate life-insurance product

Author

Listed:
  • Francisco Galarza

    (Universidad del Pacífico)

  • Ingo Outes Leonb

    (University of Oxford)

Abstract

We designed and implemented a field experiment in rural Peru, in order to examine the sensitivity of the demand for micro life-insurance products to the introduction of rebates (cash-backs), which are partial refunds of the insurance premium when no insured event occurs. We find that cash-backs do appear to create higher levels of trust between the insurer and the insurance policy holder, thus offering the promise to increase the demand for insurance. This result suggests that cash-backs can be an attractive product innovation in developing countries.

Suggested Citation

  • Francisco Galarza & Ingo Outes Leonb, 2016. "Do you want some cash-back? Assessing the demand for a no-claim rebate life-insurance product," Working Papers 16-04, Centro de Investigación, Universidad del Pacífico.
    • Handle: RePEc:pai:wpaper:16-04
    as

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    References listed on IDEAS

    as
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    5. Schneider, Pia, 2005. "Trust in micro-health insurance: an exploratory study in Rwanda," Social Science & Medicine, Elsevier, vol. 61(7), pages 1430-1438, October.
    6. Abhijit Banerjee & Esther Duflo & Richard Hornbeck, 2014. "Bundling Health Insurance and Microfinance in India: There Cannot Be Adverse Selection If There Is No Demand," American Economic Review, American Economic Association, vol. 104(5), pages 291-297, May.
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    Keywords

    Cash-back; life micro-insurance; experimental economics;
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