Market Research

These studies explore low-income households’ needs for microinsurance as well as opportunities and challenges to microinsurance provision in order to project microinsurance market development. Both exploratory qualitative research and representative household survey are undertaken to answer the research objectives in a comprehensive manner. Methodology

Research Results:

The aim of the research was to explore the need, and potential market, for micro-insurance amongst low-income households in Armenia. Market research was undertaken in order to assess the potential opportunities and challenges to micro-insurance provision in Armenia and as a means to project micro-insurance market development.

Despite unquestionable developments in recent years poverty is still high in Romania. About 25% of the population lives below the poverty line, 64% can be classified as those who live on low income that is insufficient for normal functioning in a society. The road out of poverty for low-income households in Romania is hard and unpredictable. Such crises as unexpected death of a family member, serious illness, weather risks affecting agricultural production as well as property damage put a significant financial pressure on low-income households. Evidently, low-income households need to increase their risk-management capacities. Micro-insurance is one of the options that might be considered.

According to our estimations out of 5.17 million low-income households in Romania approximately 45% can benefit from private micro-insurance services. This is a considerable group that takes an advantage of market-based social risk-management mechanism.

Poverty is high in Ukraine but compared to other transition countries low-income households in Ukraine are relatively less vulnerable. A majority of the low-income people in Ukraine are salaried workers.
Despite not very high vulnerability, low-income population is in need of additional risk-management options. Risks like bigger health crises, accidents leading to disability and property losses put a very significant pressure on the households and are perceived as the most burdensome in Ukraine.

Given current circumstances the total market that can be reached now and in the future accounts for approximately 60% of all households in Ukraine (approx 20 million policies) for each of the generic microinsurance products tested.

Demand for Microinsurance in Georgia: Quantitative Study Results, Michal Matul, MFC, submitted to Michael J. McCord, Microinsurance Centre, April 2005

The need for microinsurance among poor and vulnerable households in Georgia is very high. The impact of risks on lower-income groups is much more acute as they do not have access to good risk management strategies and very often, in a very reactive manner, have to borrow from many sources to face emergency expenses. The occurrence of stressful coping mechanisms that lead to further impoverishment proves a need for widening risk management options for the poor in order to reduce their vulnerability to risks.
Moreover, there is a strong correlation between household over-indebtedness and impact of risks. The need for microinsurance relates primarily to the coverage of basic healthcare costs, death of the main family breadwinner and, to a certain extent, coverage of property loss. Health risks are the most prevalent.
As hardly anyone uses insurance (and nobody uses microinsurance) it is hard to project future microinsurance market development based on historical trends.
Health insurance seems to have the biggest potential as 32% of the market can be covered in the short-term. The total market within the access frontier now for health insurance can be estimated at 850,000 policies. Moreover, this market can be doubled in the medium-term.

 

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