Reducing Vulnerability: The Supply of Health Microinsurance in East Africa
Can suppliers sustainably cater to the microinsurance market?
This paper addresses the supply side of microinsurance in East Africa. It is based on a study of the seven institutions:
- Uganda: Microcare, CIDR, Kitovu Patients Prepayment Scheme;
- Kenya: MediPlus, Community Health Plan;
- Tanzania: Poverty Africa and the Community Health Fund.
Some of the observations in these institutions were:
- All are financially weak except the Tanzanian government program;
- Pricing insurance products is very difficult for all;
- Some are implementing health promotion;
- Some have good risk management policies and procedures;
- Financial sustainability of all is uncertain;
- Some low-income people get access to better health care at an affordable price.
Some of the lessons from the experience of the institutions studied are:
- Adequate management capacity should be available to make micro insurance programs successful;
- Emergency loans, with disbursements made directly to the health care facility, can be appropriate and sometimes preferred over insurance;
- Underwriting should be simple and efficient for the low-income market;
- Marketing requires a strong component of market training;
- The partner that carries the risk should be well capitalized and willing and able to lose some money while the product is growing;
- Formal agreements with partners should be constructed so that everyone is clear about their role;
- External health information outreach programs should be coordinated with micro insurance.
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