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Viewing microinsurance as a social risk management instrument

Author

Listed:
  • Siegel, Paul B.
  • Alwang, Jeffrey
  • Canagarajah, Sudharshan

Abstract

The objectives of this paper are to highlight some of the potential and limitations of microinsurance in the context of Social Risk Management (SRM) framework to stimulate further discussion. The paper draws on existing literature on SRM and microinsurance. Where relevant, it invokes lessons from microfinance. The authors conclude that there is potential for efficient and equitable risk management through microinsurance, but also limitations. Microinsurance may be an acceptable means of managing a few limited forms of risk, but not all. SRM practitioners need to recognize that effectiveness of any risk management instrument depends on the nature of risks, household and group characteristics and dynamics, and the availability of alternative risk management options. SRM options should strike a balance between household risk management activities and the multiple instruments available at different institutional levels, including informal, market-based, and publicly provided mechanisms. Microinsurance is a potential part of the SRM toolbox, but risk management can be enhanced through different mechanisms or combinations of them.

Suggested Citation

  • Siegel, Paul B. & Alwang, Jeffrey & Canagarajah, Sudharshan, 2001. "Viewing microinsurance as a social risk management instrument," Social Protection and Labor Policy and Technical Notes 23305, The World Bank.
  • Handle: RePEc:wbk:hdnspu:23305
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    References listed on IDEAS

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    1. Robert Holzmann & Steen Jørgensen, 2001. "Social Risk Management: A New Conceptual Framework for Social Protection, and Beyond," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 529-556, August.
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    Citations

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    Cited by:

    1. Gurenko, Eugene & Mahul, Olivier, 2003. "Combining insurance, contingent debt, and self-retention in an optimal corporate risk financing strategy," Policy Research Working Paper Series 3167, The World Bank.
    2. Mirko Bendig & Thankom Arun, 2011. "Microfinancial Services And Risk Management: Evidences From Sri Lanka," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(4), pages 97-126, December.
    3. Arun, Thankom & Bendig, Mirko & Arun, Shoba, 2012. "Bequest Motives and Determinants of Micro Life Insurance in Sri Lanka," World Development, Elsevier, vol. 40(8), pages 1700-1711.
    4. World Bank, 2003. "Rural Financial Services : Implementing the Bank's Strategy to Reach the Rural Poor," World Bank Other Operational Studies 14677, The World Bank.
    5. Llanto, Gilberto M., 2008. "Policy and Regulatory Issues and Challenges in Microinsurance: a Philippine Case," Philippine Journal of Development PJD 2007 Vol. XXXIV No. 1, Philippine Institute for Development Studies.
    6. Gurenko, Eugene & Olivier, Mahul, 2004. "Enabling productive but asset-poor farmers to succeed : A risk financing framework," Policy Research Working Paper Series 3211, The World Bank.
    7. Jutting, Johannes Paul, 2002. "Die neue Rolle von Sozialer Sicherung für ländliche Entwicklung in Entwicklungsländern," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(4).
    8. Gilbert M. Llanto & Joselito Almario & Marinella Gilda Llanto-Gamboa, 2006. "Microinsurance in the Philippines : Policy and Regulatory Issues and Challenges," Development Economics Working Papers 22649, East Asian Bureau of Economic Research.
    9. Bendig, Mirko & Arun, Thankom Gopinath, 2011. "Enrolment in Micro Life and Health Insurance: Evidences from Sri Lanka," IZA Discussion Papers 5427, Institute for the Study of Labor (IZA).
    10. Ahuja, Rajeev & Jutting, Johannes Paul, 2003. "Are The Poor Too Poor To Demand Health Insurance?," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25821, International Association of Agricultural Economists.

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