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From Participation To Repurchase: Low Income Households And Micro‐insurance

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  • Renuka Sane
  • Susan Thomas

Abstract

The article asks what drives the time to repurchase for life and accident insurance contracts in low income households. We use data on customers of a financial services provider from three states in India and find that the probability of repurchase is highest in the first 2 months after the contract expires, and steadily declines after. This suggests a window of opportunity for financial firms and governments to target customers to ensure continuous insurance purchase. Nonmembership of microfinance groups and poor rainfall in the month of expiry affect the time to repurchase adversely. Customers who take longer to repurchase tend to increase the amount of insurance cover.

Suggested Citation

  • Renuka Sane & Susan Thomas, 2020. "From Participation To Repurchase: Low Income Households And Micro‐insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(3), pages 783-814, September.
    • Handle: RePEc:bla:jrinsu:v:87:y:2020:i:3:p:783-814
    DOI: 10.1111/jori.12288
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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