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Client perceptions of the value of microinsurance: evidence from southern Ghana

  • Lena Giesbert
  • Susan Steiner
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    Abstract India has one of the highest underweight burdens in the world, with signs of rising obesity. Coexistence of underweight and overweight women is symptomatic of the double burden of malnutrition. The present study aims to throw new light on the double burden of malnuThe uptake of microinsurance in developing countries falls short of projections, which has recently made stakeholders focus on client value. However, empirical research on what constitutes client value in microinsurance has been limited. As a starting point for further investigations, we draw a first conceptual sketch of the dimensions of client value. Our analysis is based on qualitative data from focus group discussions among both existing and potential clients of a micro life insurance in southern Ghana. Using a multidimensional approach, we show that client value is based on the perceived quality, costs and consumption outcome, as well as the emotional and social value of micro life insurance. In their value judgments, focus group participants particularly emphasize the quality of customer service provision, the (expected) insurance benefits, and positive emotions associated with insurance coverage. The evaluation of the value of the microinsurance under study is mixed. We therefore also investigate why clients form the value perceptions they do. This investigation finds that large discrepancies between people’s expectations and experiences reduce the perceived value of the insurance product. It shows that contextual factors, such as clients’ knowledge about insurance, their interaction with peers, and the availability and effectiveness of alternative risk management options, largely shape whether they perceive high or low value in micro life insurance.trition among Indian women in the age group 22-49 years. The analysis is based on a nationally representative household survey, InAlthough growth has improved substantially in most African countries in recent years, poverty across the continent has fallen very little in the aggregate, even though there have been outstanding performances by some countries. Indeed, some African countries have slipped back, and exhibit higher poverty rates than in 1990. This paper seeks to understand the reasons for this variance between countries; the reasons why, certainly if one uses headcount poverty data, there are ‘two Africas’, one with powerful ability to reduce poverty and one without. We argue that some of the reasons for this difference are rooted in colonial times, and those countries which developed dynamic exports of smallholder cash crops, the ‘peasant export economies’, received a headstart in relation to mineral- and large farm-based economies, because of the more equitable income distribution which labour-intensive, smallholder-based economies generate. However, in the post-colonial period, many peasant export economies wasted this headstart, and some mine/plantation economies were able to transcend the limitation of not having received one. The key reasons for this evolution, we argue, lie in the motivation and ability of African elites to form pro-poor coalitions, which in some cases were then able to implement tax and expenditure policies with the ability to bring a pro-poor pattern of growth into being. This story is tested both econometrically and by means of four contrasted country case studies.dia Human Development Survey, 2005. The results indicate that the factors underlying this burden include socio-economic status (SES), location, marital status, age, education, physical activity, media exposure, and dietary composition and frequency of eating. We find that there is a socio-economic patterning of underweight and overweight women, with a large concentration of underweight women among those with a low SES and of overweight women among high SES. Given that the health implications of being underweight and overweight are grim, it is imperative that there is a simultaneous increase in the focus on the health needs of overweight and obese people and on the needs of the large number of severely undernourished people in society. For Indian women, the glaring health/nutrition disparities are matched only by the grimness of their existence and survival prospects.

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    File URL: http://www.bwpi.manchester.ac.uk/medialibrary/publications/working_papers/bwpi-wp-19214.pdf
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    Paper provided by BWPI, The University of Manchester in its series Brooks World Poverty Institute Working Paper Series with number 19214.

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    Date of creation: 2014
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    Handle: RePEc:bwp:bwppap:19214
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    1. Stefan Dercon, 2000. "Income risk, coping strategies and safety nets," CSAE Working Paper Series 2000-26, Centre for the Study of African Economies, University of Oxford.
    2. Cai, Jing & de Janvry, Alain & Sadoulet, Elisabeth, 2013. "Social Networks and the Decision to Insure," MPRA Paper 46861, University Library of Munich, Germany.
    3. Susan Steiner & Lena Giesbert, 2010. "Microinsurance: A Large Untapped Market," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 6(33), pages 245-249.
    4. Cole, Shawn & Gine, Xavier & Tobacman, Jeremy & Topalova, Petia & Townsend, Robert & Vickery, James, 2010. "Barriers to household risk management : evidence from India," Policy Research Working Paper Series 5504, The World Bank.
    5. Stefan Dercon (QEH), Tessa Bold, Cesar Calvo, . "Insurance for the Poor?," QEH Working Papers qehwps125, Queen Elizabeth House, University of Oxford.
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    7. Monique Cohen & Jennefer Sebstad, 2005. "Reducing vulnerability: the demand for microinsurance," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(3), pages 397-474.
    8. Xavier Giné & Robert Townsend & James Vickery, 2008. "Patterns of Rainfall Insurance Participation in Rural India," World Bank Economic Review, World Bank Group, vol. 22(3), pages 539-566, October.
    9. Rebecca L. Thornton & Laurel E. Hatt & Erica M. Field & Mursaleena Islam & Freddy Solís Diaz & Martha Azucena González, 2010. "Social security health insurance for the informal sector in Nicaragua: a randomized evaluation," Health Economics, John Wiley & Sons, Ltd., vol. 19(S1), pages 181-206, September.
    10. Bolton, Ruth N & Drew, James H, 1991. " A Multistage Model of Customers' Assessments of Service Quality and Value," Journal of Consumer Research, University of Chicago Press, vol. 17(4), pages 375-84, March.
    11. Lena Giesbert & Susan Steiner & Mirko Bendig, 2011. "Participation in Micro Life Insurance and the Use of Other Financial Services in Ghana," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 78(1), pages 7-35, 03.
    12. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    13. Monique Cohen & Michael J. Mccord & Jennefer Sebstad, 2005. "Reducing vulnerability: demand for and supply of microinsurance in East Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(3), pages 319-325.
    14. Sheth, Jagdish N. & Newman, Bruce I. & Gross, Barbara L., 1991. "Why we buy what we buy: A theory of consumption values," Journal of Business Research, Elsevier, vol. 22(2), pages 159-170, March.
    15. Craig Churchill, 2002. "Trying to understand the demand for microinsurance," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(3), pages 381-387.
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