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The Facility offers small research grants on a competitive basis for academics, particularly from developing countries, to analyze various microinsurance issues. Besides answering key questions in the Facility's research agenda [see the
research strategy - (pdf 631 KB)], these grants are intended to increase the supply of knowledgeable microinsurance experts and promote microinsurance in academic circles.
The 2nd round of research grants on microinsurance is open: Apply now!
The Microinsurance Innovation Facility and the European Development Research Network (EUDN) invite academic researchers to submit proposals for research that will contribute to new knowledge and support microinsurance development in developing countries.
To apply, first fill in the cover sheet (xls 16 KB) then make sure your research proposal strictly follows the guidelines (pdf 250 KB). Applications should be sent to microinsurance@fundp.ac.be by 30th October 2009 at 12pm (noon) Central European Time.
First round of research grants
In the 1st round (which closed in January 2009), the Facility received more than 60 proposals for studies to be conducted in 25 developing countries. Since we were only able to award grants to a small percentage of those who applied, the competition was fierce, leaving several interesting proposals unfunded. Those selected were focused research projects that responded to specific questions of the Facility's learning agenda.
The short description of the selected proposals (with references to the Facility's learning agenda in brackets) is as follows.
Consumer education
| Title: | Financial literacy for
weather insurance |
| By: |
Shawn Cole, Harvard Business School, USA
Sarthak Gaurav, Indira Gandhi Institute of Development Research, India |
| Core research topic: |
Impact of financial literacy on weather-index insurance take-up and renewals (2.3) |
| Country of study: | India |
| Completion date: | January 2010 |
| Description: | Scaling-up formal risk management instruments like weather insurance requires an inquiry into the causes of low take-up rates among agricultural households. Measuring financial literacy and evaluating its impact on financial behaviour poses formidable challenges, as it is often closely correlated with confounding factors, such as liquidity constraints and indebtedness, which affect risk-management decisions. This study will attempt to establish a causal measure of the impact of financial literacy on risk-management behaviour by testing a financial literacy module on weather risk hedging with villagers in Gujarat, India.
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Health insurance
| Title: | Economic value of willingness
to pay for a community-based prepayment scheme in rural Cameroon |
| By: |
Hermann P. P. Donfouet, University of Yaoundé II, Cameroon
Ephias M. Makaudze, University of Western Cape, South Africa |
| Core research topic: |
Determinants of willingness to pay for health insurance (2) |
| Country of study: | Cameroon |
| Completion date: | March 2010 |
| Description: | In Cameroon's rural areas, poor people do not have access to high quality health care services due to their limited financial capacity. Community-based insurance are one strategy to increase access to health care and alleviate poverty. The objective of the study is to assess the willingness of rural households to pay for health insurance. Using self-collected household data, this study will contribute to a greater understanding of what motivates clients in their purchasing decisions.
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| Title: | Barriers to access health care and
the role of subsidized health insurance for farmers |
| By: |
Aurélia Lépine, Alexis Le Nestour, CERDI, France
Samba Mbaye, Gaston Berger University, Senegal |
| Core research topic: |
Demand for health insurance (2.1)
and potential client value from a new subsidized health insurance scheme (1.1) |
| Country of study: | Senegal |
| Completion date: | April 2010 |
| Description: | This study will support the development of a new health insurance scheme for farmers by the Government of Senegal, which subsidizes 70% of the premium. During this project, baseline household data will be collected to analyze access barriers and demand for health care in a rural district in Senegal, with a special focus on analyzing the effects of out-of-pocket expenditures on health care access. The results will help shape the product design and explore potential client value from the new government scheme.
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| Title: |
Microinsurance utilization in Nicaragua: the demand for and effects
of insurance enrolment among informal sector workers |
| By: | Rebecca L. Thornton, Anne Fitzpatrick,
University of Michigan, USA
Barbara Magnoni, EA Consultants, USA |
| Core research topic: | Impact of health insurance on healthcare utilization by children (1.2); impact of perceived quality of health care on insurance client retention (2); sustainable pricing of health microinsurance (3.4) |
| Country of study: | Nicaragua |
| Completion date: | January 2010 |
| Description: | This project will analyze data collected in two phases of a randomized evaluation of insurance take-up and retention among informal sector workers in Managua, Nicaragua. Using two rounds of existing data collected among 4,000 uninsured workers, this study aims to: 1) measure the causal effects of insurance on the health care utilization of children; 2) analyze health claims data collected from clinics to provide insight on sustainable pricing solutions; and 3) analyse how low retention rates are linked to the quality of care received at public health institutions. The results of this study will be useful to private and public sector insurers interested in developing health insurance products for informal workers.
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| Title: | Understanding the effects of adverse
selection and moral hazard on micro-health insurance. |
| By: | Andreas Madestam, Bocconi University, Italy
Erik Grönqvist, Uppsala University, Sweden |
| Core research topic: | Information asymmetries, moral hazard,
adverse selection and their impact on scheme viability (3.1, 3.6); Impact of microinsurance on
health and income uncertainty (1.2, 1.3) |
| Country of study: | |
| Completion date: | April 2010 |
| Description: | To ensure sustainable delivery and equitable access to microinsurance, it is important to understand potential constraints, such as information asymmetries, that may hamper its success. This study will provide initial assessments of the intended beneficiaries' price and risk elasticity, risk profiles, as well as information on educational attainment, health preferences, and occupation. This deliverable will in turn feed into the design of a larger field experiment. By successfully estimating the presence and importance of moral hazard and adverse selection, we will better understand the viability of health insurance in a developing country context.
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Impact of insurance
| Title: | Does micro-credit increase bonded
child labour in absence of microinsurance? |
| By: |
Sayan Chakrabarty, Shahjalal University of Science and Technology, Bangladesh |
| Core research topic: |
Impact of microinsurance on reducing child labour (1.4) |
| Country of study: | Bangladesh |
| Completion date: | January 2010 |
| Description: | This research aims to discover whether access to microcredit might increase bonded child labour in the absence of microinsurance by comparing borrowers with and without microinsurance. Climate related risks are a major source of vulnerability for rural households in northern Bangladesh, which is prone to Monga (seasonal food insecurity). As a result, child labour is prevalent, especially among microcredit clients who need to generate more income to repay their loans. This study collects household data to explore if there are differences in the prevalence of child labour depending on whether the households have insurance.
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| Title: | Demand impacts of introducing
complex bundled microfinance loans in India |
| By: |
Esther Duflo, Abhijit Banerjee, Richard Hornbeck,
J-PAL, Massachusetts Institute of Technology |
| Core research topic: | Effects of bundling
health insurance with microcredit (1.1, 1.2, 2.1, 3.1) |
| Country of study: | India |
| Completion date: | November 2011 |
| Description: | This research project seeks to determine the effects of bundling health insurance with microcredit, on both demand and supply sides. Are households more willing to invest in higher return activities when they have the health insurance cover? Do they prefer the bundled offer or do they want to have access only to microcredit? Do microfinance organizations suffer from adverse selection when they provide health insurance? This research is being done within the context of a broader randomized controlled trial in Hyderabad, India, studying health, health insurance and microcredit.
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Index and crop insurance
| Title: | Experimenting with Group
Crop Insurance Design |
| By: |
Daniel Clarke, Rocco Macchiavello, Oxford University, UK |
| Core research topic: |
Optimal group contracts for crop insurance products (1.1, 3.1) |
| Country of study: | |
| Completion date: | January 2010 |
| Description: | Economic theory predicts that microinsurers could provide optimal insurance contracts by acting as a reinsurer to groups of individuals who have access to information about each other, such as extended families or community organisations. This study explores the potential of developing new insurance contracts that pay out to groups of farmers above a certain group-level co-payment. This study seeks to understand how well group excess of loss-style crop insurance performs relative to individual insurance (including weather index insurance). As a precursor to design and pilot test new crop insurance products, the project will set up laboratory experiments with farmers to better understand the potential of group microinsurance.
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| Title: | Risk-Modelling Crop Loss in Ghana |
| By: | James R. Jones,
Illinois State University, Katie School of Risk Management and Insurance, USA |
| Core research topic: | Correlations between rainfall, crop yield,
crop prices, agriculture income, morbidity and mortality - to develop more accurate weather index
insurance (3.7) |
| Country of study: | Ghana |
| Completion date: | October 2009 |
| Description: | This project will collect and analyze weather event, crop loss, and other health and economic data in Ghana. This research will add value by fully developing new correlations among these variables and comprehensive indices, which will be useful to design weather-indexed products to mitigate agricultural losses. By reducing covariant risk, these insurance products would enable banks to lend to farmers in Ghana and other drought prone regions.
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| Title: | Remote sensing in agriculture insurance |
| By: | Mangesh Patankar,
Centre for Insurance and Risk Management, India
Gargi Upadhyay, Indian Space Research Organization, India
Kunal Soni, IFFCO Tokio General Insurance Limited, India |
| Core research topic: | Comparing accuracy of remote sensing
based crop insurance with weather index insurance (3.7); client appreciation of remote sensing
based crop insurance products (2) |
| Country of study: | India |
| Completion date: | February 2010 |
| Description: | Crop insurance using satellite imagery is expected to more accurately compensate farmers' actual losses than normal weather index insurance products. However, few experiments on such products have happened in developing countries. One of the barriers to commercializing such products is convincing farmers to trust the process of claims management. The proposed research project studies this problem systematically in a few remote Indian districts and tries to propose solutions. Furthermore, it tests, quantitatively, the accuracy of the product by comparing it to hypothetically designed weather index insurance products. The research is expected to provide insights for crop insurers and open up a new market.
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| Title: | Weather-insured savings accounts (WISA) |
| By: | Jeremy Tobacman,
University of Pennsylvania, USA
Daniel Stein, London School of Economics, UK |
| Core research topic: | Determinants of demand for WISA (2);
value of WISA for low-income farmers (1.1, 1.2, 1.5), viability of WISAs (3.7) |
| Country of study: | India |
| Completion date: | January 2010 |
| Description: | Index-based weather insurance has the potential to help farmers mitigate their largest risks. Experience from three years of randomized field evaluations in Gujarat, India has shown that the complexity of insurance is a major impediment to adoption. Leveraging their collaborations with the Self-Employed Women's Association (SEWA) and the Centre for Microfinance, the authors plan to design, pilot, and evaluate a simpler, demand-driven innovation: a weather-insured savings account (WISA). Interest payments will be high in times of bad weather and low in time of good weather. The project will assess the determinants of demand for WISA, the effect of simplicity, and the value of WISA for helping farmers endure droughts and floods.
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