Pricing of Microinsurance or Rate Making

Alexander S. Preker and David Dror

Chapter 5 in Health Microinsurance:Implementing Universal Health Coverage in the Informal Sector, 2020, pp 65-89 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In commercial insurance, it is common practice to charge each individual the premium that reflects that person’s estimated contribution to the risk pool. However, in microinsurance, community rating is applied, whereby every participant pays the same premium, irrespective of age, gender, health status, or claims history. This methodology is challenging in terms of pricing the package and maintaining an equilibrium between high-risk and low-risk individuals. The reality in microinsurance practice is that the price determines the package, rather than the other way around. This chapter provides a detailed guideline on context-dependent pricing.

Keywords: Microinsurance; Health Insurance; CBHI; Community-Based Health Insurance; Health Financing; Insurance for Poor; Universal Health Coverage; Rural; Education (search for similar items in EconPapers)
JEL-codes: G22 I11 I13 I15 (search for similar items in EconPapers)
Date: 2020
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