میراث انگیزه ها و عوامل میکرو بیمه عمر در سری لانکا

This paper emphasizes bequest motives by evaluating participation patterns in micro life insurance against insurance demand and supply side factors. Based on household survey data from Sri Lanka, it presents evidence on the determinants of micro life insurance participation of low-income households, using probit and tobit models. The results provide evidence that micro life insurance is positively correlated with measures of bequest motives such as the number of children or dependents. Besides, better off households are less excluded from micro life insurance markets than their poorer counterparts. The study finds a convincing need for the microinsurance sector to be more responsive to the needs of the poor, with a key role in providing financial education to understand the need for microinsurance.

Microinsurance in developing countries is increasingly recognized as key to poverty reduction and social protection. The adverse effects of unexpected events have a significant effect on the income of the poor, as limited resources impede their recovery. A significant potential for microinsurance has been identified as a measure to reduce vulnerabilities among low-income groups, due to little ability to use ex-ante preventive risk management strategies, and mainly rely on informal mechanisms that provide only partial insurance, so that they lack sufficient options to secure against hazards (Bendig and Arun, 2011, Cohen et al., 2005, Loewe, 2001 and McCord et al., 2006). Shocks to household income, such as death or illness, generate movements in consumption of households that are not perfectly insured, and at the extreme, may lead to deprivation or death. In such cases of household shocks, microinsurance serves as a risk coping mechanism, incorporating measures for consumption smoothing. With a sudden drop in income following personal shocks, a household would then less likely be expected to take up insurance. However, in a long-term perspective, we assume that the experience of a severe hazard in the near past induces households to purchase insurance to prevent the effects of recurrent hazards. While there are different types of insurance relevant for the low-income market, we focus on the risk of death, which is frequently identified—beside illness—as the most severe hazard. A study identifies life insurance as the most widely provided microinsurance policy in the world, as it is the easiest to deliver and manage, for providers (Roth, McCord, & Liber, 2007).1 Life insurance policies are financial products that mainly consist of two differing components: income replacement for premature death and a long term saving instrument. Life insurance encourages long-term savings and the reinvestment of substantial sums in private and public sector projects. Nevertheless, the debate on the demand for formal insurance in developing countries is scantily prevalent in the literature, except for studies on informal insurance (Churchill, 2006, Dercon, 2002, Morduch, 1995, Morduch, 1999 and Townsend, 1995). Some studies have used quantitative data from household surveys to identify and analyze determinants of insurance participation (Asfaw, 2003, Bhat and Jain, 2006, Cole et al., 2009, Giné et al., 2008, Giné and Yang, 2009, Ito and Kono, 2010 and Jütting, 2003). It is the aim of this paper to add to these contributions on the cross-sectional determinants of microinsurance participation of low-income households, using comprehensive household survey data from Sri Lanka. Our approach differs from current discussions in the following ways. First, we assess the participation in micro life insurance schemes in Sri Lanka, as previous research on microinsurance has been confined to weather, crop, and health. Second, the paper pioneers to estimate if micro life insurance participation is motivated—beside other determinants—by the desire to leave bequests. Standard models of participation in life insurance suggest that life insurance participation is increasing with the present value of the beneficiaries’ consumption. If the household values bequests behavior, we argue that the present value of the beneficiaries’ consumption increases with the number of dependents, i.e., micro life insurance participation increases with the number of dependents. Modeling pure term life insurances and combinations of term life insurance and savings plans, we derive bequests using a “joy-of-giving” motive. We argue that bequests can either be intended (desired) (Hurd, 1987), altruistic (Tomes, 1982), strategic due to self-interested exchange with one’s heirs (Bernheim, Shleifer, & Summers, 1985) or unintended (accidental) (Hurd, 1994). Thereby, the purpose of the paper is to inform policy makers and insurers on the provision of micro life insurance in developing countries in the context of social protection and the options to support efforts of low-income households to use adequate risk coping measures in the case of a death within the household. The desire to leave bequests might play a key role in the decision-making process of low-income households to contract micro life insurance with either the support of the state or respective insurance providers. Third, we estimate the determinants for micro life insurance participation by using the actual use of a micro life insurance and respective premium amount as dependent variables in probit and tobit models. The actual use of insurance, i.e., the actual provision, is determined by the demand and the supply of insurance (World Bank, 2008: 28),2 so that we control on the access to life insurance in Sri Lanka by identifying the socioeconomic characteristics of the life insurance user and nonuser. Premium expenditure has been typically used as the measure of insurance consumption and coverage in prior research in developed country contexts (Browne and Kihong, 1993, Burnett and Palmer, 1984 and Truett and Truett, 1990). Premium data do not allow observing the actual amount of insurance coverage purchased, as the premium amount is a combined measure of price and level of coverage. Nevertheless, it provides an indication of insurance coverage, so that the combined usage enabled us to control for a more holistic picture of insurance participation, including both the insurance ownership and coverage (Beck & Webb, 2002). The paper is structured as follows: Section 2 depicts the microinsurance market, specific life insurance contract features and institutional details in Sri Lanka. Section 3 discusses determinants of life insurance participation, and states hypotheses to be tested. Section 4 outlines details of the survey and the methods used in the estimation. The descriptive statistics, the results of the estimations and policy perspectives are discussed in Section 5. Section 6 concludes.

The paper sheds light on the little discussed aspects of household level participation in micro life insurance in developing countries. While the take-up rates of microinsurance are still low, the participation in micro life insurance is the highest among microinsurance products offered. Using household survey data from Sri Lanka, it appears that correlates of intentional bequest motives (number of young dependents and/or number of dependents) are positively associated with micro life insurance participation, on social protection grounds. We view this finding as very strong evidence for the hypothesis that micro life insurances are purchased by the low-income households for bequest motives, so that a policy holder contracts micro life insurance to secure its beneficiaries of the consequences of his/her premature death. Emphasizing the insurance coverage, a tobit model that corrects for the censoring of life insurance premium amounts finds strong effects of the number of children on micro life insurance participation. Further research should focus on collecting longitudinal data or conducting randomized experiments to control for unobserved heterogeneity and endogeneity bias. In line with empirical findings from the literature, we find that better off households are more likely to participate in a micro life insurance scheme and to pay the respective small premium sums than their poorer counterparts. This supports previous contributions, suggesting that premium payments, even when small, can be unaffordable to many households. Even though the poor have high incentives to secure against future shocks, the amount of premiums becomes a major barrier to any micro life insurance product enrollment. In practice most of the micro life insurance providers did not have the capacity to extend their provision in the short term and one possible solution is for the government to assist with appropriate financial and technical assistance for capacity building in the existing MFIs. Household heads participating in the micro life insurance schemes tend to have lower educational attainment, as households with higher education have higher access to the commercial life insurances. Household heads, who are self-employed or contractual workers, as one typical target group, are positively related to micro life insurance participation and respective insurance coverage. Furthermore, we find no life-cycle effect for micro life insurance. Until their middle age household heads hold less micro life insurance policies, as they seem to be less educated, and less able to understand and have experience with insurance products and markets than their younger counterparts. We find indicative evidence that religious inclination is associated with the participation in micro life insurance schemes. Hindu household heads that are mainly affiliated with the Ethnic Tamil group of Sri Lanka origin are negatively associated with the uptake of micro life insurance. This might indicate that certain religious or ethnic groups have no or only limited access to micro life insurance due to discrimination by the providing institutions and staff or restricted microfinance outreach in their residential area. In multiple ways, microinsurance schemes could complement the efforts of other forms of social protection fabric of the low income population. In developing countries, both the insurance market is incomplete and the social security systems do not sufficiently target the low-income population (Arun & Steiner, 2008). As in most countries, the state is not likely to expand its traditional social security measures in the medium term, thus microinsurance is one of the possible social protection measures to mitigate the consequences in the occurrence of risks, to reduce the vulnerability among the households (Arun and Steiner, 2008 and Siegel et al., 2001). Therefore, it is necessary to primarily emphasize the intentional bequest motives in the marketing measures of microinsurance schemes and avoid the mix with investment motives or deceptive offers, such as the promise to use insurance as collateral for loans. We find that many of the micro life policy holders have bought insurance, with the notion that insurance is obligatory, or as collateral for the loan. However, since the providers are part of a microfinance institution, the loans are generally approved on the basis of group guarantee which many of the users are unaware of. These kinds of information asymmetries have to be addressed in the development and marketing of the appropriate products. Preferably, the insurer must emphasize the security aspects of micro life insurance, particularly on the aspects of leaving bequests behind for their beneficiaries and dependents. The providers need to build trust among the user groups by developing simple, affordable, and easily understandable micro life insurance products. Although the majority of the households surveyed are satisfied with the services they receive from the microinsurance providers, the inappropriateness of the coverage seems to be a major concern, another significant factor for the slow growth of the sector. Both the issues of information and coverage need to be addressed in the regulatory framework in the sector which rekindles interests among the user groups and move the sector forward to be more responsive to their needs. Furthermore, the state and microinsurance sector agencies need to invest in financial education of the households which may address the issues of self-exclusion and discrimination by improving the understanding of the benefits of insurance among the poor.