The Market for Microinsurance in Ukraine: Low Income Household Needs and Market Development Projections

This study studies the need for microinsurance among low-income households in Ukraine. It explores the opportunities and challenges to microinsurance provision in Ukraine in order to project the development of the microinsurance market in the countryThe study:

• Undertakes exploratory qualitative research and representative household surveys to answer the research objectives in a comprehensive manner.
• Presents the results of qualitative and quantitative market research in Ukraine with the application of the access frontier methodology to estimate potential effective demand.

The study finds that:

• Bigger risks put significant pressure on households in Ukraine and low-stress coping mechanisms are not enough to respond to these risks,
• Health, disability and life with long-term savings microinsurance services promise to fill this risk-management gap,
• Positive signs such as knowledge of and enthusiasm for insurance exist among the medium- and high-income households in Ukraine, but low-income households exhibit a distrust of insurance companies,
• Market development projections identify three zones in the microinsurance market: market enablement zone, market development zone, and market redistribution zone.

The study recommends the following strategies to tap the low-income market tin the country:

• A reform of the supply system that should aim at building reliability and professionalism of the insurance system,
• Insurance education provision that would help low-income households to see the benefits of insurance and make the right choice.