Paper
Reducing Vulnerability: The Supply of Health Microinsurance in East Africa
Can suppliers sustainably cater to the microinsurance market?
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This paper addresses the supply side of microinsurance in East Africa. It is based on a study of the seven institutions:
- Uganda: Microcare, CIDR, Kitovu Patients Prepayment Scheme;
- Kenya: MediPlus, Community Health Plan;
- Tanzania: Poverty Africa and the Community Health Fund.
Some of the observations in these institutions were:
- All are financially weak except the Tanzanian government program;
- Pricing insurance products is very difficult for all;
- Some are implementing health promotion;
- Some have good risk management policies and procedures;
- Financial sustainability of all is uncertain;
- Some low-income people get access to better health care at an affordable price.
Some of the lessons from the experience of the institutions studied are:
- Adequate management capacity should be available to make micro insurance programs successful;
- Emergency loans, with disbursements made directly to the health care facility, can be appropriate and sometimes preferred over insurance;
- Underwriting should be simple and efficient for the low-income market;
- Marketing requires a strong component of market training;
- The partner that carries the risk should be well capitalized and willing and able to lose some money while the product is growing;
- Formal agreements with partners should be constructed so that everyone is clear about their role;
- External health information outreach programs should be coordinated with micro insurance.
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