Risks across borders: A study of the potential of microinsurance products to help migrants cope with cross border risks
Magnoni, Barbara; Annette Lovoi; Julia Brown; Rebecca Thornton, Multilateral Investment Fund, September 2010
The path of a migrant is generally a risky one. Crossing borders, often illegally; leaving loved ones behind; trusting new people along the way; earning uncertain income. All these activities involve risk. Once migrants reach their destination, they face a new set of risks: learning languages and new cultural norms; seeking out employment in new environments; finding living arrangements.
This paper presents new evidence on migration and risk among one particular group of migrants – Mexican migrants to the United States living in the New York City area. Mexican migrants sent US$21 billion to Mexico each year; these remittances represent the second largest source of hard currency for the country after oil revenues.
With new responsibilities and new risks, immigrants from Mexico in the United States are in need of tools and coping strategies to help manage new risks. Currently, most of these strategies are informal. This paper examines these risks and how products can and need to be adapted to their needs.
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Microinsurance: A case study of the Indian rainfall index insurance market
Giné, Xavier; Lev Menand; Robert Townsend; James Vickery, World Bank, October 2010
Rainfall index insurance provides a payout based on measured local rainfall during key phases of the agricultural season, and in principle can help rural households diversify a key source of idiosyncratic risk.
This paper describes basic features of rainfall insurance contracts offered in India since 2003, and documents stylised facts about market demand and the distribution of payouts.
The authors summarise the results of previous research on this market, which provides evidence that price, liquidity constraints, and trust all present significant barriers to increased take-up. They also discuss potential future prospects for rainfall insurance and other index insurance products.
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