Insurance for the Poor?

Abstract

Microinsurance is the provision of insurance services to the poor, usually in developing countries. One of the key criteria of poverty is vulnerability even to minor events. In such cases even micro coverage can make a major difference, yet still be funded by an affordable contribution by the insured. Like any kind of insurance, microinsurance can cover different risks to life, health, farming, property among other things. Our paper sketches how one could address and develop microinsurance business ethics. First we introduce microinsurance to the business ethics community and business ethics to the microinsurance community. Our draft of microinsurance ethics is then developed from two angles: as a holistic understanding of ideals and possible ethical conflicts in key stakeholder relationships and by distinguishing eight challenges when targeting the poor and when marketing microinsurance. As an open ending, the paper suggests a three stage action research design focusing on how microinsurance could (and should) internalize ethics, respecting rather than neglecting national-cultural and localcultural conditions.

The sharing economy at the base of the economic pyramid: How access‐based services can help overcome ownership risks

“…Poverty increases risk aversion (Haushofer & Fehr, 2014) because small deviations can have severe consequences at the subsistence level. As Radermacher and Brinkmann (2011, p. 63) explain: “The poor in developing countries are exposed to numerous risks in their daily lives. […] However, the capacity […] to deal with such risks is often very limited.” In line with this notion, Melesse and Cecchi (2017) describe risk aversion among farm households in developing countries as a key trigger for “poverty traps.”…”

“…Different approaches for how consumers at the base of the pyramid may deal with risks have been discussed in the literature, such as micro‐insurance, spreading risks over multiple households, or taking on parallel occupations in various sectors (Banerjee & Duflo, 2007; Radermacher & Brinkmann, 2011). Additionally, Hill (2008, p. 82) suggests that to achieve livelihood improvements, consumers are forced to seek alternatives to conventional consumption strategies, such as “communities where sharing of possessions regularly occurs.” Therefore, services that provide shared access may be a viable alternative.…”

“…Poverty increases risk aversion (Haushofer & Fehr, 2014) because small deviations can have severe consequences at the subsistence level. As Radermacher and Brinkmann (2011, p. 63) Different approaches for how consumers at the base of the pyramid may deal with risks have been discussed in the literature, such as microinsurance, spreading risks over multiple households, or taking on parallel occupations in various sectors (Banerjee & Duflo, 2007;Radermacher & Brinkmann, 2011). Additionally, Hill (2008, p. 82) suggests that to achieve livelihood improvements, consumers are forced to seek alternatives to conventional consumption strategies, such as "communities where sharing of possessions regularly occurs."…”

The link between guanxi and customer–salesperson collusion

“…Over the years, researchers have investigated which factors can lead to insurance frauds (Abramovsky, 2008; Dionnes et al , 2000; Lesch and Brinkmann, 2011; Miyazaki, 2009; Radermacher and Brinkmann, 2011). Previous research has asserted that the principal–agent problem between companies and agents could enhance the agents’ intention to behave opportunistically (Akerlof, 1970).…”

Instruments for Development Controls in Gerbangkertosusila

“…The Turkish government also implements disincentives such as higher taxes for companies producing waste disposals (Kaya, et al, 2006). Radermacher and Brinkmann (2011) propose a micro insurance for the poor in developed countries. In dealing with marine pollution, certified ship or quality shipping can be used as an incentive to reduce naval pollution (Kaps, 2004).…”