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Insurance for the Poor?

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  • Stefan Dercon (QEH), Tessa Bold, Cesar Calvo

Abstract

Uninsured risk has substantial welfare costs, not just in the short run, but also in terms of perpetuating poverty. This paper discusses the scope for extending insurance to the poor in LAC countries. It is argued that insurance provision to the poor could play an important role in a comprehensive system of protection against risk, including other ex-ante measures such as promoting credit and savings as insurance, as well as a credible overall ex-post safety net. Insurance provision is best promoted via a partner-agent model, in which a local finance institution with close links to relatively poor communities teams up with an established insurer to deliver low cost, tailored products, and possible products include life, health, property and weather insurance. An essential role of the government would be to promote insurance provision to the poor by a relevant regulatory framework favouring MFIs within a partner-agent setup, and to provide overall credibility to the overall system of social protection. The paper also argues for the involvement of local indigenous risk-sharing and finance institutions as intermediaries to maximise the ability to reach the poor and the overall welfare benefits

Suggested Citation

  • Stefan Dercon (QEH), Tessa Bold, Cesar Calvo, "undated". "Insurance for the Poor?," QEH Working Papers qehwps125, Queen Elizabeth House, University of Oxford.
  • Handle: RePEc:qeh:qehwps:qehwps125
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    File URL: http://www3.qeh.ox.ac.uk/RePEc/qeh/qehwps/qehwps125.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lena Giesbert & Susan Steiner, 2015. "Client Perceptions of the Value of Microinsurance: Evidence from Southern Ghana," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(1), pages 15-35, January.
    2. d'Errico, Marco & Pietrelli, Rebecca & Romano, Donato, 2016. "Household resilience to food insecurity: evidence from Tanzania and Uganda," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236350, Agricultural Economics Society.
    3. Lena Giesbert and Susan Steiner, 2011. "Perceptions of (Micro)Insurance in Southern Ghana: The Role of Information and Peer Effects," GIGA Working Paper Series 183, GIGA German Institute of Global and Area Studies.
    4. Lena Giesbert, 2012. "Subjective Risk and Participation in Micro Life Insurance in Ghana," GIGA Working Paper Series 210, GIGA German Institute of Global and Area Studies.
    5. César P. Bouillon & Luis Tejerina, 2006. "Do We Know What Works?: A Systematic Review of Impact Evaluations of Social Programs in Latin America and the Caribbean," IDB Publications (Working Papers) 2801, Inter-American Development Bank.
    6. Marco d’Errico & Rebecca Pietrelli, 2017. "Resilience and child malnutrition in Mali," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(2), pages 355-370, April.
    7. Alejandro de la Fuente, 2007. "Private and Public Responses to Climate Shocks," Human Development Occasional Papers (1992-2007) HDOCPA-2007-22, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    8. Mekonnen, Tigist, 2017. "Willingness to pay for agricultural risk insurance as a strategy to adapt climate change," MERIT Working Papers 028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Ralf Radermacher & Johannes Brinkmann, 2011. "Insurance for the Poor?," Journal of Business Ethics, Springer, vol. 103(1), pages 63-76, April.
    10. César P. Bouillon & Luis Tejerina, 2006. "Do We Know What Works?: A Systematic Review of Impact Evaluations of Social Programs in Latin America and the Caribbean," IDB Publications (Working Papers) 80443, Inter-American Development Bank.
    11. Berhanu, Wassie, 2011. "Recurrent shocks, poverty traps and the degradation of pastoralists’ social capital in southern Ethiopia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 6(1), March.

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