MR Microinsurance_2012_03_29.indd - International Labour ...

80 Emerging issues
3.3.3 Psychological effects
Psychologically, microinsurance is thought to promote increased peace of mind
and individual empowerment. As regards peace of mind, for example, microinsurance
hypothetically alleviates fear and stress by increasing members’ sense of
security about the future. Policyholders involved with community-based
schemes, through which local people design and administer benefit packages
themselves, might further be empowered by the bargaining, communication,
social and financial skills that they develop while participating. Unfortunately,
none of the studies considered here assessed either of these presumed effects.
3.3.4 Community impact
Microinsurance is believed to cause six types of spill-over effect that impact nonmembers
in microinsurers’ wider communities of operation. While these outcomes
are described below, none of the studies cited here assessed them unless specified.
– Job creation – The most visible manifestation of a microinsurance-related spillover
effect is job creation. Simply put, microinsurers need sales people, actuaries,
plan administrators, claims adjudicators, premium collectors, IT providers and
personnel such as doctors and meteorologists to create, implement and oversee
their product range. Since some plans have millions of policyholders, the
amount of employment generated is potentially significant, though many microinsurers
also, and sometimes exclusively, rely on volunteers.
– Investment – Similarly, the premiums collected by microinsurers can be saved or
invested either locally, for example, in microinsurers’ related microcredit activities,
or in national and international markets. This effect is more likely with longterm
policies that have savings components (see Chapter 8).
– Infrastructural and regulatory changes – Uninsured community members
benefit from infrastructural and regulatory changes that microinsurers help create.
For example, Aggarwal (2010) noted that the shift to private providers precipitated
by India’s Yeshasvini scheme created space in public facilities for uninsured
individuals. Similarly, Wagstaff and colleagues (2009) determined that
China’s New Cooperative Medical Scheme had a significant impact on staffing
and capital investments at township-level providers. However, given their observation
of supply-side moral hazard, they were concerned that “increased stocks of
expensive equipment” might result in “patients … getting tests and treatments
that are medically unnecessary, or which the [health centres are] insufficiently
skilled to deliver”.
– Changing local disease burdens – Highly subscribed health-related plans are also
thought to reduce local disease burdens and produce potential collateral behavioural
changes among uninsured individuals in their regions of operation. For