Risk Management and Demand for Microinsurance among Rural Households

Abstract

Risk and vulnerability is a main component of daily life for poor people. Life is risky for the newlinepoor in developing countries. The rural households not only want insurance to be affordable, but newlinealso to protect against high-frequency risks such as serious ill health, accidents, harvest failure and newlinefire. The study was mainly concerned with primary data. The collected data have been analysed by newlineusing suitable statistical tools. . The data were collected from rural households by adopting random newlinesampling technique, through carefully instructed interview schedule constituted 558 respondents. newlineAccess Frontier Approach developed by David Porteous is adopted in projecting the market newlinedevelopment for microinsurance. The approach is applied to determine the size of the market for newlinethe group within access frontier for different types of microinsurance products namely health, life newlineand property insurance and to develop marketing strategies to reach those within Access Frontier newlineNow and in Future. newlineMicroinsurance is not only the mechanism for reducing vulnerability but also ensure social newlineand economic security to the rural households. It protects rural households against those risks that newlinethey are unable to protect themselves through informal mechanisms, savings or credit. newlineMicroinsurance providers are concerned that coverage of risks can be provided on a sustainable newlinebasis. Microinsurance initiatives launched by Governments, insurers and other organisations to newlineprotect the lives, health and assets of the rural households have made a tremendous impact, but newlinetheir reach has been very limited compared to the size of the unreserved population. So far, the newlinedelivery of insurance to the rural households has not been an integral part of many financial newlineservice providers market strategies. Hence it is suggested to adopt proper marketing strategies to newlinereach the major population. newlinei) Major objectives : newline To analyse the factors that influence the risk and risk management strategies. newline To determine the awareness of microinsurance products.