The effect of microinsurance on the insurance market: evidence from Taiwan

Shirley Ho () and Hsiu-Hao Hsu ()
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Hsiu-Hao Hsu: National Chengchi University

The Geneva Papers on Risk and Insurance - Issues and Practice, 2021, vol. 46, issue 1, No 7, 130-145

Abstract: Abstract Microinsurance is one of the fastest growing new markets for the billions at the bottom of the financial pyramid – low-income customers previously precluded from traditional insurance. Will insurers really benefit from serving a larger amount of customers? This paper attempts to provide answers by examining the performance of life insurers in Taiwan. Our results show that microinsurance dummy variables are negatively related to efficiency scores and premium income in both OLS and Tobit models. Providing microinsurance products will increase competition between micro and traditional insurance products and reduce market demand for traditional insurance. The efficiency and premium income of traditional insurers will decrease if the price of microinsurance is regulated at marginal cost.

Keywords: Microinsurance; Insurance market; Competition (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41288-020-00175-6

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