Microinsurance demand: determinants and strategies

Abstract

Vulnerability to risk, a constant factor in the lives of the poor, is a cause of persistent poverty. Microinsurance offers one approach to mitigating risk, yet demand is disappointingly low. This paper aims to improve the understanding of factors that determine the demand for microinsurance products. Based on a review of more than 30 studies, it blends academic findings with practical examples and presents the most important determinants of demand, including understanding of insurance, client value, liquidity constraints, trust, behavioural factors, and use of other risk coping mechanisms. The paper also presents solutions that can be incorporated into an organization's marketing strategy.