Reducing Vulnerability: The Supply of Health Microinsurance in East Africa

Can suppliers sustainably cater to the microinsurance market?
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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.

About this Publication

By McCord, M. J. & Osinde, S.