Guidelines for Market Research on the Demand for Microinsurance

This paper states that the demand for microinsurance grows out of the risks and risk management strategies of low-income households. What risks do poor people face? How do they manage these risks? How effective are their strategies? What are the gaps? Demand is further shaped by the current ‘landscape of insurance. What formal and informal insurance mechanisms exist? What losses do they cover? When and how do different groups among the poor use them? How effective are they at protecting against losses? Do they address the priority needs of low-income households? Where are the gaps?Understanding these critical gaps in managing risks is a starting point for identifying microinsurance products for the poor. From here, the challenge becomes how to zero in on insurable risks and design products that are feasible, acceptable, and affordable. What type and level of coverage do low-income groups need? What exclusions, premium amounts, payment options, and payment systems ‘fit with their preferences and capacities?Further the document details that qualitative market research can play an important role in developing appropriate microinsurance products for the poor by addressing these questions.This report offers guidance for conducting qualitative market research on the demand for microinsurance. The immediate audience for these guidelines includes donors interested in funding the development of the microinsurance sector and practitioners responding to the demands of customers for risk management products.