MILK Brief n°13: Doing the Math - Funeral and life microinsurance in the Philippines
Magnoni; Barbara, Derek Poulton, and Emily Zimmerman, MILK Brief n°13, MicroInsurance Centre, August 2012
For this brief, the MILK team partnerned with the global microinsurance broker MicroEnsure and the microfinance institution Taytay Sa Kauswagan Inc. (TSKI) in the Iloilo province of Panay island in the Philippines, using its Client Math methodology to explore some of the open questions about the value of a combined funeral and life insurance product for low-income clients.
The study explored the role of microinsurance in helping low income families cope with the financial consequences of a death, seeking to understand how the insurance product fit into the range of tools available to those families.
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Barriers to household risk management: Evidence from India
Cole; Shawn, Xavier Giné, Jeremy Tobacman, Petia Topalova, Robert Townsend and James Vickery, International Monetary Fund, July 2012
Why do many households remain exposed to large exogenous sources of non-systematic income risk? To answer this question, this paper uses a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of the innovative rainfall
insurance product.
Demand is significantly price sensitive, but widespread take-up would not be achieved even if the product offered a payout ratio comparable to U.S. insurance contracts. The study presents evidence suggesting that lack of trust, liquidity constraints and limited salience are significant non-price frictions that constrain demand and suggests contract design improvements to mitigate these frictions.
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