Microinsurance: Exploring Ways to Assess Its Impact

This study aims to identify and refine indicators that can be used to study the impact of microinsurance. The study:

• Explores how household financial behavior may change as a result of purchasing insurance, and compares how those with insurance cope with risks differently from those without insurance.
• Identifies areas or ‘'domains' of impact that can be expected to change as a result of having insurance.
• Uses a causal model of insurance impact that:
  • Draws from a general framework that ‘'IRIS/Microfinance Opportunities' team developed to study the impact of various microfinance innovations;
  • Ties together different levels of analysis, the relevant domains of impact, and sets of indicators that correspond to the domains.
• Addresses questions about the impact of microinsurance on:
  • Behaviors, knowledge, skills and attitude of policyholders;
  • The ability of a household to smooth consumption, and to withstand economic shocks;
  • The asset base of poor households.

The study team undertook qualitative research in Uganda of two kinds of insurance - life insurance and health insurance. It found the following impacts of insurance on policy-holders:

• Differences in knowledge and attitudes;
• A better understanding of health risks;
• Better ability to cope with shocks, income smoothing.

The study concludes by highlighting several key areas for further investigation.