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Perceptions of (Micro)Insurance in Southern Ghana: The Role of Information and Peer Effects

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  • Lena Giesbert
  • Susan Steiner

Abstract

This article investigates the understandings and perceptions of (micro)insurance among low-income people in southern Ghana, using evidence from four focus group discussions. It analyzes how the focus group participants think about various types of insurance - among them a micro life insurance product - and how their negative and/or positive evaluations have come about. The evidence indicates that (micro)insurance is mostly positively perceived by the participants of the focus group discussions. However, it is also found that many people's image of insurance is based on incomplete (and sometimes erroneous) information, or even on intuition. In addition, the experiences or opinions of peers turn out to be critical in shaping an individual's perception of insurance. These two factors potentially have a contagious effect, which can lead to unreasonably positive or overly negative ideas about (micro)insurance. Such ideas, in turn, can become detrimental to the further distribution of microinsurance.

Suggested Citation

  • Lena Giesbert & Susan Steiner, 2012. "Perceptions of (Micro)Insurance in Southern Ghana: The Role of Information and Peer Effects," Discussion Papers of DIW Berlin 1194, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1194
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    References listed on IDEAS

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    1. Shawn Cole & Xavier Gine & Jeremy Tobacman & Petia Topalova & Robert Townsend & James Vickery, 2013. "Barriers to Household Risk Management: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 104-135, January.
    2. Doss, Cheryl R., 1996. "Do Households Fully Share Risk? Evidence From Ghana," Staff Papers 13439, University of Minnesota, Department of Applied Economics.
    3. Gin, Xavier & Yang, Dean, 2009. "Insurance, credit, and technology adoption: Field experimental evidencefrom Malawi," Journal of Development Economics, Elsevier, vol. 89(1), pages 1-11, May.
    4. 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.
    5. Stefan Dercon, 2002. "Income Risk, Coping Strategies, and Safety Nets," World Bank Research Observer, World Bank Group, vol. 17(2), pages 141-166, September.
    6. Wang, H. Holly & Rosenman, Robert, 2007. "Perceived need and actual demand for health insurance among rural Chinese residents," China Economic Review, Elsevier, vol. 18(4), pages 373-388.
    7. 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.
    8. 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.
    9. 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.
    10. Stefan Dercon (QEH), Tessa Bold, Cesar Calvo, "undated". "Insurance for the Poor?," QEH Working Papers qehwps125, Queen Elizabeth House, University of Oxford.
    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, March.
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    Cited by:

    1. Amos Gitau Njuguna & Abigael Arunga, 2013. "Risk Management Practices: A Survey of Micro-Insurance Service Providers in Kenya," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 4(1), pages 132-150, January.

    More about this item

    Keywords

    Microinsurance; risk management; perception; Ghana; focus groups;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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