Client-value of Microinsurance Products: Evidence from the Mutual Assistance Fund in Vietnam
This case study of Mutual Assistance Fund (MAF), a pioneer microinsurance provider in Vietnam, investigates client preferences for microinsurance products. It examines the extent to which the current line of microinsurance sold by MAF is able to satisfy client needs. The study examines factors influencing microinsurance take up and identifies potential gateways for microinsurance to serve the uninsured poor population. It also explores household perceptions about the advantages and limitations of MAF. MAF was started in 1996 as a single line of life-credit insurance. Currently, it provides a basic health insurance product with capped benefits of VND 1 million (about USD 50), which is renewable every five years, for hospital visits and medications. The study interviewed 353 client and non-client households in three villages. Findings include:
- Most non-clients were unaware of MAF activities;
- Current premium offered by MAF is too low and has no significant effect on client preferences over product attributes;
- Clients are willing to pay higher premiums to receive higher levels of payouts;
- Clients prefer simpler claim procedures;
- Main factors that affect product preferences are previous experience with insurance, mathematical ability, and attitude towards risk.