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The Demand for Microinsurance: A Literature Review

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  • Platteau, Jean-Philippe
  • De Bock, Ombeline
  • Gelade, Wouter

Abstract

Microinsurance has recently received much attention as a promising tool to protect poor individuals from important shocks. Yet, voluntary demand from people has been low, shedding doubt on the viability of microinsurance as a useful risk-management tool. To better understand this puzzle, this paper reviews both the theoretical and empirical literature on the demand for insurance. While people's lack of understanding of insurance does seem to limit the demand for it, several more fundamental factors, such as price, quality, limited trust in the insurer, and liquidity constraints also seem to have an important role in explaining the puzzle.

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  • Platteau, Jean-Philippe & De Bock, Ombeline & Gelade, Wouter, 2017. "The Demand for Microinsurance: A Literature Review," World Development, Elsevier, vol. 94(C), pages 139-156.
  • Handle: RePEc:eee:wdevel:v:94:y:2017:i:c:p:139-156
    DOI: 10.1016/j.worlddev.2017.01.010
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    Cited by:

    1. Awel Y. & Azomahou T.T., 2015. "Risk preference or financial literacy? Behavioural experiment on index insurance demand," MERIT Working Papers 005, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Petraud, Jean & Boucher, Stephen & Carter, Michael, 2015. "Competing theories of risk preferences and the demand for crop insurance: Experimental evidence from Peru," 2015 Conference, August 9-14, 2015, Milan, Italy 211383, International Association of Agricultural Economists.
    3. Takahashi, Kazushi & Ikegami, Munenobu & Sheahan, Megan & Barrett, Christopher B., 2014. "Quasi-experimental evidence on the drivers of index-based livestock insurance demand in Southern Ethiopia," IDE Discussion Papers 480, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Renuka Sane & Susan Thomas, 2016. "From participation to repurchase: Low income households and micro-insurance," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2016-019, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. Mohamed Keinan Hassan & Jane Gathenya & Mike Iravo, 2017. "Moderating Effect of Index Based Livestock Insurance on Socio-Cultural Factors Affecting Performance of Livestock Projects in North Eastern Kenya," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(3), pages 99-116, March.
    6. Abigail Barr & Trudy Owens & Ashira Perera, 2017. "Risk taking and sharing when risk exposure is interdependent," Discussion Papers 2017-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    7. Carolina Laureti & Alain De Janvry & Elisabeth Sadoulet, 2017. "Flexible Microfinance Products for Financial Management by the Poor: Evidence from SafeSave," Working Papers CEB 17-036, ULB -- Universite Libre de Bruxelles.
    8. Martin Eling & Shailee Pradhan & Joan T Schmit, 2014. "The Determinants of Microinsurance Demand," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 39(2), pages 224-263, April.
    9. Bocoum, Fadima & Grimm, Michael & Hartwig, Renate & Zongo, Nathalie, 2017. "Nudging Households to Take Up Health Insurance: Evidence from a Randomized Experiment in Burkina Faso," IZA Discussion Papers 10744, Institute for the Study of Labor (IZA).
    10. Aloysius G. Brata & Piet Rietveld & Henri L.F. de Groot & Budy P. Resosudarmo & Wouter Zant, 2014. "Living with the Merapi Volcano: Risks and Disaster Microinsurance," Departmental Working Papers 2014-13, The Australian National University, Arndt-Corden Department of Economics.
    11. Jean Philippe Platteau & Darwin Ugarte Ontiveros, 2013. "Understanding and Information Failures in Insurance: Evidence from India," Development Research Working Paper Series 07/2013, Institute for Advanced Development Studies.
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    13. Cousins, Mel, 2014. "Social Protection in the Mekong: policy trends and future directions," MPRA Paper 60026, University Library of Munich, Germany.
    14. Jean Philippe Platteau & Darwin Ugarte Ontiveros, 2013. "Understanding and Information Failures: Lessons from a Health Microinsurance Program in India," Working Papers 1301, University of Namur, Department of Economics.

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    Keywords

    micro-insurance; demand; trust; risk; insecurity; microfinance;

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