Microinsurance for the Poor - the Informal ("Jua Kali") Sector in Kenya

What are the welfare effects of micro-insurance on the poor?

Partner organizations

What are the welfare effects of micro-insurance on the poor?

Founded in 1958 in Stockholm, Sweden, the Swedish Cooperative Centre (SCC) is a non-profit, non-governmental organization established to provide development support to cooperatives and other pro-poor people's organizations. SCC is the leading partner responsible for the management and administration of the 'Bima ya Jamii' composite microinsurance project.

The Cooperative Insurance Company Ltd (CIC) of Kenya was established in 1978, with the help of Folksam Mutual Insurance Company. It is now the preferred underwriter of the co-operative movement in Kenya. CIC is the risk carrier for the accidental death and funeral components of the composite product.

Kenya's National Health Insurance Fund (NHIF) is a government agency which collects contributions from very low-income Kenyans and pays hospital benefits out of the contributions to members and their declared dependants (spouse and children).The NHIF is the risk carrier for the health component of the composite product.

Product

The Bima Ya Jamii ("Insurance for the Family") scheme is a composite product of health, funeral, accidental death and disability insurance bundled together. As of November 2009, about 17,000 policies have been issued. One policy covers the the primary member and all family members, with no upper age limit. On average, one policy covers 5 lives.

For an annual premium of 3,650 Kenyan shillings (about USD $49), the policy provides the following benefits:

• Hospitalization: all doctor fees, bed charges, including food, X-ray and laboratory costs, all prescribed drugs, dressings, ICU charges and any other in-patient procedure. No deposits required upon admission.
• Maternity: costs for normal and Caesarean births
• Treatment of chronic and pre-existing medical conditions
• Full coverage of costs for surgeries in government hospitals; some subsidy for surgeries at other hospitals
• Compensation for loss of income for up to a maximum period of 25 weeks for primary member
• Payment for total permanent accidental disability or accidental death

• Funeral expenses for primary member
• Option to extend funeral expenses to additional family members for added cost

Evaluation design

Experimental: random assignment of access to microinsurance product

Data Sources

• Surveys: household surveys
• Observation: physiological markers of stress and depression

Sample size

900

Project link

• Related impact evaluation of Bima Ya Jamii scheme: "Impact Evaluation of Composite Microinsurance and Consumer Education"