Assessing the Demand for Microinsurance in Uganda

This study identifies the common risks that low-income households face and their coping strategies to assess the potential demand for microinsurance in the rural and urban areas of Uganda. It aims to:

• Explore the level of satisfaction with current services provided by existing formal and informal insurance programs;
• Serve as a guide for designing microinsurance products;
• Suggest the most appropriate microinsurance products to mitigate risk effectively.

The study finds that low income households:

• Are prone to several risks that directly affect the level and/or sources of income and their productive assets;
• Have limited support from the formal insurance sector to manage such risks;
• Have several strategies to manage risks and crises in their households;
• Lack a sound understanding of microinsurance concepts or its advantages.

Finally, the study lists the lessons learnt for designing microinsurance products in Uganda:

• The insurance sellers should be well informed about the insurance products;
• The design of micro insurance products should be simple and clear;
• Written material to provides product information to clients should be available;
• The income and expenditure seasonality trends of the community should be understood for designing premium schedules;
• Client needs and requirements should be borne in mind.