Natural disasters are increasing in frequency and intensity and have devastating impacts on individuals, both humanitarian and economic, particularly in developing countries. Microinsurance is seen as one promising instrument of disaster risk management, however the level of demand for respective projects remains low. Using behavioural games and a discrete choice experiment, this paper analyses the demand for hypothetical microinsurance products in rural Cambodia and contributes significant household level evidence to the current research. A general preference for microinsurance can be found, with demand significantly affected by price, provider, requirements for prevention and combinations with credit. Furthermore, financial literacy, risk aversion, levels of trust and previous disaster experience impact the individual demand for flood insurance in rural Cambodia.

This thesis uses laboratory experiments to develop a methodology to estimate the expected welfare benefits of insurance for individuals, conditional on their risk preferences. This methodology is then applied to study the welfare effects of issues that impact microinsurance, or insurance for the poor. The first result is that insurance take-up not a good proxy for the expected welfare gain of an individual’s choice to purchase or not to purchase insurance. The second result is that basis risk reduces the welfare obtained from index insurance. This welfare is significantly improved by having greater behavioral consistency with the Reduction of Compound Lotteries axiom. Finally, the risk of contract non-performance from the insurer significantly reduces the welfare obtained from insurance purchase decisions.

Los microseguros son una herramienta de gestión que permiten controlar los riesgos a los que se encuentran expuestas las pequeñas y medianas empresas. Debido a la baja penetración de este producto en el mercado de seguros, se pretende analizar los factores que influyen en la limitada demanda, como la falta de canales adecuados de distribución, informalidad de pequeñas y medianas empresas (no bancarizadas), falta de difusión y escasa cultura de seguros, así como una tarificación acorde a las necesidades del mercado meta. El objetivo es impulsar la penetración de microseguros desde una perspectiva socio-económica que brinde al usuario la protección de su patrimonio frente a situaciones adversas, logrando que las pequeñas y medianas empresas se integren en el mercado de seguros. Esto será viable en la medida que se difunda la educación financiera y la cultura de seguros a través de los distintos programas que promueve la Superintendencia de Banca y Seguros y entidades privadas. La estrategia de distribución es uno de los factores claves que va a permitir la captación de asegurados y lograr una mayor recaudación de primas. Con el crecimiento de los microseguros, las compañías aseguradoras tendrán la responsabilidad de analizar su oferta mejorando el diseño del producto y adecuándolo a las necesidades del mercado. / Microinsurance is a management tool that allows controlling the risks to which small and medium-sized companies are exposed. Due to the low penetration of this product in the insurance market, it is intended to analyze the factors that influence the limited demand, such as the lack of adequate distribution channels, informality of small and medium enterprises (unbanked), lack of diffusion and poor insurance culture, as well as pricing according to the needs of the target market. The objective is to promote the penetration of microinsurance from a socio-economic perspective that provides the user with the protection of their heritage in the face of adverse situations, achieving that small and medium-sized companies are integrated into the insurance market. This will be viable to the extent that financial education and insurance culture are disseminated through the different programs promoted by the Superintendence of Banking and Insurance and private entities. The distribution strategy is one of the key factors that will allow the capture of policyholders and achieve a higher premium collection. With the growth of microinsurance, insurance companies will have the responsibility to analyze their offer by improving the design of the product and adapting it to the needs of the market. / Trabajo de Suficiencia Profesional

L’Organisation des Nations Unies a décrété l’année 2005 « année du microcrédit », dans l’espoir de réduire la pauvreté dans le monde, conformément aux huit objectifs du millénaire pour le développement (OMD). Présenté comme un précieux instrument de lutte contre la pauvreté, ce système créé par le Docteur Muhammad YUNUS prix Nobel de la Paix 2006 et fondateur de la Grameen Bank au Bangladesh, s’est propagé à travers le monde et notamment dans les pays en développement. Il permet d’offrir des petits prêts à des populations pauvres exclues du système financier afin de développer des activités génératrices de revenus et d’épargner. Plus connu sous le nom de la microfinance, ce terme désigne aujourd’hui, le microcrédit, l’épargne, le transfert d’argent et l’assurance. En effet, l’accès aux prêts n’excluait pas les autres risques, car le décès, la maladie, l’invalidité et les dommages aux biens fragilisaient aussi ces populations, révélant leur besoin d’assurance et il est évident que la prise de conscience de leur état de pauvreté, suscite la réduction de leur vulnérabilité. Une logique sous-tend l’offre par le biais de la « microassurance » dont le champ sémantique et opérationnel relève des compétences des assureurs qui en se lançant sur ce marché, doivent faire face à de nombreux défis car la microassurance s’inscrit dans des contextes bien spécifiques. Entre innovations et traditions, la démarche sera conçue dans le cadre d'une politique intégrée avec les Etats, acteurs traditionnels du développement, institutions de microfinance, organisations non gouvernementales et bailleurs de fonds internationaux, dont l'appui était essentiel. En dix ans, la microassurance a connu une croissance extraordinaire. Mais malgré les efforts accomplis, le bilan montre qu’il reste encore du chemin à faire. / The United Nations declared 2005 as the « Year of Microcrédit », in the hopes of reducing the level of world poverty, as part of the eight main objectives of the millennium development goals " OMD ". Presented as a valuable tool against poverty, this system created by Doctor Muhammad Yunus, 2006 Nobel Peace Price, and founder of the Grameen Bank in Bangladesh, is used throughout the world and most notably in developing countries.It allows " small loans " to impoverished populations which are excluded from financial systems so that they can develop activities that generate income as well as offer them the opportunity to save. More known as " microfinance", this term refers today, microcredit, savings, money transfer and insurance.Indeed, access to loans does not exclude other risks such as death, sickness, invalidity, as well as potential damages to capital goods. These numerous risks show their absolute need for insurance and it is obvious that awareness of their poverty will reduce their vulnerability.A development logic behind the offer through the " microinsurance " whose semantics and operational field within the competence of insurers embark on this market have to overcome a number of challenges as the field of " microinsurance " are in very specific and often difficult contexts.Between innovative and traditional, the approach will be integrated policy with the states, the traditional development actors, microfinance institutions, ONGs, international donors, whose support was essential.In ten years, " microinsurance " has experienced a extraordinary growing. But despite the progress that has been made, the resume shows that there is still much work to do.

This research is concerned with understanding the role of consumer behaviour in microinsurance. There are notable factors such as premium flexibility, household income and marital status which serve as demand determinants of microinsurance; however the ultimate challenge is to influence consumer behaviour enabling growth of this insurance product. An established microinsurance sector results in the financial inclusion of low income consumers currently situated at the Bottom of the Pyramid, this is followed by economic development and subsequently economic growth for the broader society.Data was collected using a questionnaire from participants residing in East Bank, Alexandra, a South African township with a significant number of households in the LSM 1-4. The questionnaire collected data relating to basic financial services, characteristics of the Bottom of the Pyramid, as well as short term microinsurance demand.The findings show an immediate need towards the understanding of consumer behaviour by microinsurance stakeholders, including government and the private sector. It is only through innovation, partnership and low income consumer understanding that the desired levels of microinsurance demand will be attained. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Insurance is a prudent option to mitigate business risk and property loss caused by natural disasters. The current study took place in Accra, Ghana, and was prompted by the low adoption of insurance and limited understanding by home and small business owners of its risk mitigation value. The purpose of this multiple-case study was to explore information insurance companies' need to motivate investment in weather-related insurance. The interview questions of the study served to explore the reasons business owners and homeowners purchase or decline insurance, including their understanding of and receptivity to insurance. The theoretical underpinning of this study included the Butterfoss and Kegler's community coalition action theory and Freire's empowerment theory. A purposive sampling technique was used to recruit 17 insured and uninsured homeowners and business owners. Interview data were thematically analyzed using a process of constant comparison of transcripts. The important themes that emerged from the analysis included the lack of trust in insurance providers, a lack of availability of alternate coping mechanisms, consumers' limited understanding of insurance, and the lack of public education and awareness of disaster risks. The findings indicated that educational programs should promote the needs and benefits for insurance, the government should enforce insurance laws and regulations, and insurance organizations should improve insurance marketing practices to build trust. These findings may contribute to positive social change by creating awareness among Ghanaians about the benefits of insurance to mitigate the effects of natural disasters. Research findings may be useful to insurance business leaders seeking to increase revenue and profitability

O presente trabalho objetiva analisar o mercado e as perspectivas para o desenvolvimento do microsseguro de vida no Estado do Rio Grande do Sul, buscando identificar benefícios e dificuldades no desenvolvimento desta iniciativa no contexto atual. O referencial teórico adotado envolve a análise do comportamento do consumidor sob condições de incerteza e dos modelos de demanda e oferta de seguro e de microsseguro. Os modelos e as experiências internacionais sobre o tema e a contextualização do arcabouço legal e estrutural do mercado de seguros de vida no país foram analisados para, ao final, apresentar uma simulação de uma operação de microsseguro de vida no Rio Grande do Sul. O seguro é a proteção econômica que o indivíduo busca para prevenir-se contra uma necessidade aleatória e a carência de proteção securitária para a população de baixa renda faz nascer o conceito de microsseguro, despertando o interesse das companhias seguradoras. A regularização dos provedores informais de microsseguro, o desenvolvimento de produtos adequados – tanto em coberturas quanto em valores de prêmios, a distribuição eficiente dos produtos e a minimização dos custos de cobrança dos prêmios são questões chaves para o microsseguro e podem ser fatores determinantes para ampliar a taxa de acesso nesse mercado. O resultado da simulação realizada mostrou que, adotando-se uma taxa de acesso média de 5,19%, que corresponde à taxa de acesso média da população em geral aos seguros de vida, os valores são pouco expressivos frente aos prêmios e indenizações consolidados do mercado de seguros para o seguro de vida em grupo no Estado do Rio Grande do Sul. Considerando-se um cenário otimista, caso a taxa média de acesso passasse para 50% do grupo segurável, os prêmios e as indenizações corresponderiam a 22,69% e a 33,25%, respectivamente, do montante observado no mercado de seguros para o seguro de vida em grupo no Estado. Verificou-se que, embora exista demanda potencial para o microsseguro de vida no Estado do Rio Grande do Sul, questões como a forma de distribuição e de cobrança e as regras de constituição e solvência para os provedores de microsseguros ainda devem ser melhor avaliadas. Entende-se como primordial a educação financeira e a conscientização da importância do seguro como instrumento estabilizador para que sejam possíveis maiores taxas de acesso aos seguros de vida, viabilizando a operação e reduzindo em parte a vulnerabilidade da população de baixa renda. / This study is an analysis of the life microinsurance market and the perspectives for its development in Rio Grande do Sul, seeking to identify the benefits and the difficulties of developing such initiative in the current context. The adopted theoretical reference involves the analysis of consumer behavior under uncertainty and models of demand and supply for insurance and microinsurance. The models and international experiences on the topic, along with legal context and structural framework of the life insurance market in Brazil, were analyzed in order to simulate how microinsurance operations work in Rio Grande do Sul. Insurance is an economic protection that an individual gets in order to provide means for oneself against a random need. The lack of insurance protection for the low income population brings forth the concept of microinsurance, attracting the interest of insurance companies. The regularization of informal microinsurance providers, the development of proper products, both in coverage and premium, the efficient distribution of products and the minimization of premium collection costs are key topics in microinsurance and may be determining factors for such access rate to be expanded in this market. The simulation pointed that, by adopting an average access rate of 5.19%, which corresponds to the average access rate of general population to life insurances, values are not very significant when compared to the consolidated premiums and claims payments of group life insurance in Rio Grande do Sul. Considering an optimistic scenario, in which average access rate is 50% of the insurable group, premiums and claims payments would be, respectively, 22.69% and 33.25% of the amount obtained in group life insurance market in Rio Grande do Sul. Even though there is a potential demand for life microinsurance in Rio Grande do Sul, issues such as distribution, premium collection and rules of constitution and solvency for microinsurance providers still have to be more deeply analized. Financial education and awareness of the importance of insurance are the instruments for stabilization and for delivering higher access rates to life insurance, enabling, thus, the whole operation and partially reducing the vulnerability of the low income population.

O presente trabalho objetiva analisar o mercado e as perspectivas para o desenvolvimento do microsseguro de vida no Estado do Rio Grande do Sul, buscando identificar benefícios e dificuldades no desenvolvimento desta iniciativa no contexto atual. O referencial teórico adotado envolve a análise do comportamento do consumidor sob condições de incerteza e dos modelos de demanda e oferta de seguro e de microsseguro. Os modelos e as experiências internacionais sobre o tema e a contextualização do arcabouço legal e estrutural do mercado de seguros de vida no país foram analisados para, ao final, apresentar uma simulação de uma operação de microsseguro de vida no Rio Grande do Sul. O seguro é a proteção econômica que o indivíduo busca para prevenir-se contra uma necessidade aleatória e a carência de proteção securitária para a população de baixa renda faz nascer o conceito de microsseguro, despertando o interesse das companhias seguradoras. A regularização dos provedores informais de microsseguro, o desenvolvimento de produtos adequados – tanto em coberturas quanto em valores de prêmios, a distribuição eficiente dos produtos e a minimização dos custos de cobrança dos prêmios são questões chaves para o microsseguro e podem ser fatores determinantes para ampliar a taxa de acesso nesse mercado. O resultado da simulação realizada mostrou que, adotando-se uma taxa de acesso média de 5,19%, que corresponde à taxa de acesso média da população em geral aos seguros de vida, os valores são pouco expressivos frente aos prêmios e indenizações consolidados do mercado de seguros para o seguro de vida em grupo no Estado do Rio Grande do Sul. Considerando-se um cenário otimista, caso a taxa média de acesso passasse para 50% do grupo segurável, os prêmios e as indenizações corresponderiam a 22,69% e a 33,25%, respectivamente, do montante observado no mercado de seguros para o seguro de vida em grupo no Estado. Verificou-se que, embora exista demanda potencial para o microsseguro de vida no Estado do Rio Grande do Sul, questões como a forma de distribuição e de cobrança e as regras de constituição e solvência para os provedores de microsseguros ainda devem ser melhor avaliadas. Entende-se como primordial a educação financeira e a conscientização da importância do seguro como instrumento estabilizador para que sejam possíveis maiores taxas de acesso aos seguros de vida, viabilizando a operação e reduzindo em parte a vulnerabilidade da população de baixa renda. / This study is an analysis of the life microinsurance market and the perspectives for its development in Rio Grande do Sul, seeking to identify the benefits and the difficulties of developing such initiative in the current context. The adopted theoretical reference involves the analysis of consumer behavior under uncertainty and models of demand and supply for insurance and microinsurance. The models and international experiences on the topic, along with legal context and structural framework of the life insurance market in Brazil, were analyzed in order to simulate how microinsurance operations work in Rio Grande do Sul. Insurance is an economic protection that an individual gets in order to provide means for oneself against a random need. The lack of insurance protection for the low income population brings forth the concept of microinsurance, attracting the interest of insurance companies. The regularization of informal microinsurance providers, the development of proper products, both in coverage and premium, the efficient distribution of products and the minimization of premium collection costs are key topics in microinsurance and may be determining factors for such access rate to be expanded in this market. The simulation pointed that, by adopting an average access rate of 5.19%, which corresponds to the average access rate of general population to life insurances, values are not very significant when compared to the consolidated premiums and claims payments of group life insurance in Rio Grande do Sul. Considering an optimistic scenario, in which average access rate is 50% of the insurable group, premiums and claims payments would be, respectively, 22.69% and 33.25% of the amount obtained in group life insurance market in Rio Grande do Sul. Even though there is a potential demand for life microinsurance in Rio Grande do Sul, issues such as distribution, premium collection and rules of constitution and solvency for microinsurance providers still have to be more deeply analized. Financial education and awareness of the importance of insurance are the instruments for stabilization and for delivering higher access rates to life insurance, enabling, thus, the whole operation and partially reducing the vulnerability of the low income population.

O presente trabalho objetiva analisar o mercado e as perspectivas para o desenvolvimento do microsseguro de vida no Estado do Rio Grande do Sul, buscando identificar benefícios e dificuldades no desenvolvimento desta iniciativa no contexto atual. O referencial teórico adotado envolve a análise do comportamento do consumidor sob condições de incerteza e dos modelos de demanda e oferta de seguro e de microsseguro. Os modelos e as experiências internacionais sobre o tema e a contextualização do arcabouço legal e estrutural do mercado de seguros de vida no país foram analisados para, ao final, apresentar uma simulação de uma operação de microsseguro de vida no Rio Grande do Sul. O seguro é a proteção econômica que o indivíduo busca para prevenir-se contra uma necessidade aleatória e a carência de proteção securitária para a população de baixa renda faz nascer o conceito de microsseguro, despertando o interesse das companhias seguradoras. A regularização dos provedores informais de microsseguro, o desenvolvimento de produtos adequados – tanto em coberturas quanto em valores de prêmios, a distribuição eficiente dos produtos e a minimização dos custos de cobrança dos prêmios são questões chaves para o microsseguro e podem ser fatores determinantes para ampliar a taxa de acesso nesse mercado. O resultado da simulação realizada mostrou que, adotando-se uma taxa de acesso média de 5,19%, que corresponde à taxa de acesso média da população em geral aos seguros de vida, os valores são pouco expressivos frente aos prêmios e indenizações consolidados do mercado de seguros para o seguro de vida em grupo no Estado do Rio Grande do Sul. Considerando-se um cenário otimista, caso a taxa média de acesso passasse para 50% do grupo segurável, os prêmios e as indenizações corresponderiam a 22,69% e a 33,25%, respectivamente, do montante observado no mercado de seguros para o seguro de vida em grupo no Estado. Verificou-se que, embora exista demanda potencial para o microsseguro de vida no Estado do Rio Grande do Sul, questões como a forma de distribuição e de cobrança e as regras de constituição e solvência para os provedores de microsseguros ainda devem ser melhor avaliadas. Entende-se como primordial a educação financeira e a conscientização da importância do seguro como instrumento estabilizador para que sejam possíveis maiores taxas de acesso aos seguros de vida, viabilizando a operação e reduzindo em parte a vulnerabilidade da população de baixa renda. / This study is an analysis of the life microinsurance market and the perspectives for its development in Rio Grande do Sul, seeking to identify the benefits and the difficulties of developing such initiative in the current context. The adopted theoretical reference involves the analysis of consumer behavior under uncertainty and models of demand and supply for insurance and microinsurance. The models and international experiences on the topic, along with legal context and structural framework of the life insurance market in Brazil, were analyzed in order to simulate how microinsurance operations work in Rio Grande do Sul. Insurance is an economic protection that an individual gets in order to provide means for oneself against a random need. The lack of insurance protection for the low income population brings forth the concept of microinsurance, attracting the interest of insurance companies. The regularization of informal microinsurance providers, the development of proper products, both in coverage and premium, the efficient distribution of products and the minimization of premium collection costs are key topics in microinsurance and may be determining factors for such access rate to be expanded in this market. The simulation pointed that, by adopting an average access rate of 5.19%, which corresponds to the average access rate of general population to life insurances, values are not very significant when compared to the consolidated premiums and claims payments of group life insurance in Rio Grande do Sul. Considering an optimistic scenario, in which average access rate is 50% of the insurable group, premiums and claims payments would be, respectively, 22.69% and 33.25% of the amount obtained in group life insurance market in Rio Grande do Sul. Even though there is a potential demand for life microinsurance in Rio Grande do Sul, issues such as distribution, premium collection and rules of constitution and solvency for microinsurance providers still have to be more deeply analized. Financial education and awareness of the importance of insurance are the instruments for stabilization and for delivering higher access rates to life insurance, enabling, thus, the whole operation and partially reducing the vulnerability of the low income population.

As envisaged in the Sustainable Development Goals, eradicating poverty by 2030 is among the most important steps to achieve a better and more sustainable future. A key contribution to reach this target is to ensure that vulnerable households are effectively protected against weather-related extreme events and other economic, social and ecological shocks and disasters. Insurance products specifically designed for the needs of low-income households in developing countries are seen as an effective instrument to encompass also the poor with an affordable risk-coping mechanism and are thus highly promoted and supported by governments in recent years. However, apart from direct positive effects, the introduction of formal insurance may have unintended side effects. In particular, it might affect traditional risk-sharing arrangements where income losses are covered by an exchange of money, labour and in-kind goods between neighbours, relatives or friends. A weakening of informal safety nets may increase social inequality if poor households cannot afford formal insurance. In order to design insurance products in a sustainable way, sound understanding of their interplay with risk-sharing networks is urgently needed. Socio-environmental modelling is a suitable approach to address the complexity of this challenge. In the first part of this thesis, an agent-based model is developed to investigate the effects of formal insurance and informal risk-sharing on the resilience of smallholders. To lay the conceptual foundation for this approach, a literature review is presented which provides an overview of how to couple agent-based modelling with social network analysis. In two subsequent modelling studies, it is analysed (i) how the introduction of insurance influences the overall welfare in a population and (ii) what determines the resilience of the poorest to shocks when income is heterogeneously distributed and not all households can afford formal insurance. The simulation results underline the importance of designing insurance policies in close alignment with established risk-coping arrangements to ensure sustainability while striving to eradicate poverty. It is shown that introducing formal insurance can have negative side effects when insured households have fewer resources to share with their uninsured peers after paying the insurance premium or when they reduce their solidarity. However, especially when many households are simultaneously affected by a shock, e.g. by droughts or floods, formal insurance is a valuable addition to informal risk-sharing. By applying a regression analysis to simulation results for an empirical network from the Philippines, it is furthermore inferred that network characteristics must be considered in addition to individual household properties to identify the most vulnerable households that neither have access to formal insurance nor are adequately protected through informal risk-sharing. In the second part of this thesis, a broader perspective is taken on the use of models in socio-environmental systems. First, it is envisioned how models in combination with empirical studies could improve insurance design under climate change. Second, requirements for making socio-environmental modelling more useful to support policy and management and scientific results more influential on policy-making are synthesised. Overall, this thesis offers new insights into the interplay of formal and informal risk-coping instruments that complement existing empirical research and underlines the potential of socio-environmental modelling to address sustainability and development challenges.