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From participation to repurchase: Low income households and micro-insurance

Author

Listed:
  • Renuka Sane

    (Indian Statistical Institute, New Delhi)

  • Susan Thomas

    (Indira Gandhi Institute of Development Research)

Abstract

The paper asks what drives insurance coverage in low income households by analysing repurchase patterns of micro-insurance policies. 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 two 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. Non-membership of micro-finance groups and poor rainfall in the month of expiry affect the chance of repurchase adversely. Customers who take longer to repurchase tend to increase the amount of insurance cover.

Suggested Citation

  • 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.
  • Handle: RePEc:ind:igiwpp:2016-019
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2016-019.pdf
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    More about this item

    Keywords

    micro-insurance; credit; repurchase; India;
    All these keywords.

    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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