Matthew Andary
DARE Project: Why is the Take-up Rate of Microinsurance so Low?
Program(s) of Study: Economics
Project Supervisor: Tsvetanka Karagyozova
The DARE program has allowed me to explore topics that I would not have otherwise been able to explore. This project has helped me determine and consider areas of focus for my future career goals.
Project Description:
Microinsurance is the provision of conventional insurance products such as life, health, and property to low-income individuals in developing countries. With $69 billion generated in gross written premiums, the insurance industry in Africa represented only 1.4% of the global insurance market in 2014. In the same year, the microinsurance market in Africa collected $756 million in gross written premiums accounting for a tiny 1.1 % of the insurance industry in the continent. Further, there is a wide variation in the size and importance of the insurance sector across African countries. This variation within the continent (andacross continents) naturally brings up the question of the causes of such variation or the determinants of microinsurance demand. In this study, our goal is to formulate and estimate a sound empirical model to identify the major factors affecting microinsurance demand using data collected by the MicroInsurance Centre at Milliman and data collected from the World Bank. Are the factors affecting microinsurance demand the same as those affecting the demand for conventional insurance services identified in empirical studies? Are some factors more important than others in promoting the growth of the microinsurance sector?The Dean’s Award for Research Excellence (DARE) – Undergraduate enables our students to meaningfully engage in research projects supervised by LA&PS faculty members. Find out more about DARE.