Viewing microinsurance as a social risk management instrument

Paul B. Siegel, Jeffrey Alwang and R. Sudharshan Canagarajah ()

No 23305, Social Protection Discussion Papers and Notes from The World Bank

Abstract: The objectives of this paper are to highlight some of the potential and limitations of microinsurance in the context of Social Risk Management (SRM) framework to stimulate further discussion. The paper draws on existing literature on SRM and microinsurance. Where relevant, it invokes lessons from microfinance. The authors conclude that there is potential for efficient and equitable risk management through microinsurance, but also limitations. Microinsurance may be an acceptable means of managing a few limited forms of risk, but not all. SRM practitioners need to recognize that effectiveness of any risk management instrument depends on the nature of risks, household and group characteristics and dynamics, and the availability of alternative risk management options. SRM options should strike a balance between household risk management activities and the multiple instruments available at different institutional levels, including informal, market-based, and publicly provided mechanisms. Microinsurance is a potential part of the SRM toolbox, but risk management can be enhanced through different mechanisms or combinations of them.

Keywords: Insurance&Risk Mitigation; Banks&Banking Reform; Non Bank Financial Institutions; Environmental Economics&Policies; Health Economics&Finance (search for similar items in EconPapers)
Date: 2001-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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