Beyond the Actuary’s Guess: Lessons from 15 Studies on Client Value of Microinsurance

This paper summarizes the lessons learned from 15 Client Math studies conducted by the Microinsurance Centre’s Microinsurance Learning and Knowledge (MILK) in 10 countries for a range of life, property, and health microinsurance products. The Client Math methodology uses in-depth interviews with small samples of insured and uninsured people after they have suffered a financial shock to understand its full cost and how it was financed. It aims to understand the role that insurance plays for those who are covered, as well for a similar group of uninsured people. Lessons learned include:

• Changing the timing of payments can change how much and what type of value products have, even without changing coverage;
• Funeral and life microinsurance products have the potential to help clients avoid some of the most burdensome financing strategies;
• In case of loss due to natural disasters, faster claims payment allow insured households to minimize their lost income by enabling them to make productive investments sooner;
• Cashless microinsurance coverage has great value in reducing out-of-pocket spending at the time of a health shock;
• Microinsurance can be a valuable tool for financing the costs of illness and healthcare, though it is rarely sufficient to cover all of these costs.