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Insurance Theory And Challenges Facing The Development Of Microinsurance Markets

Author

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  • JAMES C. BRAU

    (Marriott School of Management, Brigham Young University, 610 TRNB, Provo, UT 84602, USA)

  • CRAIG MERRILL

    (Marriott School of Management, Brigham Young University, 610 TRNB, Provo, UT 84602, USA)

  • KIM B. STAKING

    (Staking Financial Consulting, 961 Antiquity Drive, Fairfield, CA 94534, USA)

Abstract

Microinsurance institutions and instruments have developed rapidly over the last decade, with policies covering tens of millions at the base of the economic pyramid. Ranging from simple policies providing life or health insurance to complex policies covering catastrophic risks for small landholders, it is a market with proven potential that demands closer attention. This paper provides a review of the nascent academic literature and then suggests some critical elements of insurance theory that may help us understand the challenges facing microinsurance markets and how these markets can better serve the needs of their customers. Although the basic theory is well known, application to microinsurance markets reveals interesting variations on known results.

Suggested Citation

  • James C. Brau & Craig Merrill & Kim B. Staking, 2011. "Insurance Theory And Challenges Facing The Development Of Microinsurance Markets," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 411-440.
    • Handle: RePEc:wsi:jdexxx:v:16:y:2011:i:04:n:s1084946711001926
    DOI: 10.1142/S1084946711001926
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    References listed on IDEAS

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    1. Ghesquiere, Francis & Mahul, Olivier, 2007. "Sovereign natural disaster insurance for developing countries : a paradigm shift in catastrophe risk financing," Policy Research Working Paper Series 4345, The World Bank.
    2. Bergh, Jeroen C.J.M. van den & Ferrer-i-Carbonell, Ada, 1999. "Economic theories of sustainable consumption," Serie Research Memoranda 0055, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Craig Churchill, 2007. "Insuring the Low-Income Market: Challenges and Solutions for Commercial Insurers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 32(3), pages 401-412, July.
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    Citations

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    Cited by:

    1. Xiaoqi Zhang & Yi Chen & Yi Yao, 2021. "Dynamic information asymmetry in micro health insurance: implications for sustainability," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 468-507, July.
    2. Isaac Akomea-Frimpong & Caleb Boadi & Roger Owusu-Boafo, 2021. "Determinants and challenges of supplying microlife insurance in Ghana," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 331-357, July.
    3. Jhonni Sinaga & Adler Haymans Manurung & Nera Marinda Machdar & John Edward Harly Jacob FoEh, 2023. "Internal and External Determinants of Risk Based Capital," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(2), pages 1-5.
    4. Yi Yao & Joan T. Schmit & Justin R. Sydnor, 2017. "The Role Of Pregnancy In Micro Health Insurance: Evidence Of Adverse Selection From Pakistan," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(4), pages 1073-1102, December.
    5. Fischer, Torben & Frölich, Markus & Landmann, Andreas, 2018. "Adverse Selection in Low-Income Health Insurance Markets: Evidence from a RCT in Pakistan," IZA Discussion Papers 11751, Institute of Labor Economics (IZA).
    6. Ketki Sheth, 2021. "Delivering health insurance through informal financial groups: Evidence on moral hazard and adverse selection," Health Economics, John Wiley & Sons, Ltd., vol. 30(9), pages 2185-2199, September.
    7. Yu Yan & Michael Faure, 2021. "Government interventions in microinsurance: evidence from China," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 440-467, July.
    8. Thereza Balliester Reis, 2021. "What is financial inclusion? A critical review," Working Papers 246, Department of Economics, SOAS University of London, UK.
    9. Michał Jurek, 2014. "The genesis and evolution of CSR self-regulation with special refer-ence to the case of financial institutions," Working papers wpaper70, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

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    Keywords

    Microinsurance; modeling;

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