MR Microinsurance_2012_03_29.indd - International Labour ...

What is the impact of microinsurance?
example, Polonsky et al. (2009) established that the healthcare utilization rates of
uninsured people increased in Armenian villages. Yip et al. (2009) similarly found
that non-members in Rural Mutual Health Care’s regions of operation engaged
in less risky self-medication.
– Group solidarity – Because of the emphasis on group solidarity and cooperation,
community-based plans are further believed to increase community cohesion.
However, by supplanting traditional coping mechanisms, which strongly
rely on established family and social ties, microinsurance might also undermine
local practices and relationships.
– Financial literacy – Through their activities microinsurance providers and
related organizations are thought to increase overall financial literacy and nurture
an insurance culture in their areas of operation. For example, many microinsurers
and advocacy institutions host public insurance information events tailored
to potentially illiterate low-income people with little formal education. BRAC,
for instance, trains members to create street performances about real-world stories
they collect from villagers that illustrate the benefits of insurance (Ahmed et
al., 2005). Individuals also absorb information from microinsurers’ marketing
materials and hear word-of-mouth spread from policyholders through their
extended social and family networks. Thus, the expansion of microinsurance
hypothetically enables even uninsured people to develop an awareness and
understanding of risk management tools and principles.
3.4 Conclusion
Few studies, and still fewer methodologically rigorous ones, have explored the
impact of microinsurance. The vast majority assess health-related policies predominantly
in Asia and sub-Saharan Africa. The evaluations presented examine a
variety of outcomes, but only three with the frequency necessary for trends to
emerge: expenditure, utilization and equity. Of these, microinsurance tentatively
seems to positively affect expenditure and utilization rates. It appears to perform
less successfully vis-à-vis issues of economic and spatial egalitarianism, however,
insofar as households with relatively low economic status or dwellings remote
from the relevant facilities enrol and claim benefits less frequently. Taken
together, though, and in comparison to microinsurance’s many assumed effects,
this is extremely sparse evidence.
A combination of four steps will improve the development community’s
understanding of microinsurance’s impact. First, more robust research designs
and analytical techniques are necessary to increase the validity of assessments’
results. As attested by the more recent studies presented here and those listed
from taking stock of on-going assessments (Impact Working Group of the
Microinsurance Network, 2011b), there fortunately appears to be movement in
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