An assessment of the countries in sub-Saharan Africa with realistic potential in health micro-insurance

Abstract

This dissertation examines the potential of a Health Micro-Insurance market in sub-Saharan Africa due to the massive number of un-insured people in the region. An analysis was made on both a micro & macro level. The former is a gap analysis between a successful company and one which failed. It focuses on factors such as distribution, technology and regulation, without which a sustainable micro-insurance market would not be possible. On a macro level, HMI still lags behind due to poor health infrastructure and the lack of Micro-Insurance regulations. The latter was a major focus of this study and the general conclusion is that Micro-Insurance requires a tailor-made framework. Micro-insurance differs from conventional insurance due to issues such as lack of underwriting data, small premiums, and simple products. The study concludes that the development of mobile technology is vital bedrock for HMI to succeed in sub-Saharan Africa. This allows large-scale distribution while simultaneously minimizing transactional and operational costs. Findings show that for distribution partnerships must be complemented with sophisticated IT systems to combat fraud & adverse selection. Furthermore, all parties to a partnership must have compatible goals within reasonable time-frames. This study suggests that the ball has started rolling in sub-Saharan Africa and there are promising signs for HMI to achieve realistic potential. Nonetheless, HMI firms must be supported by macro level factors which are still very primitive in sub-Saharan Africa. The market potential is huge and if governments work closer with insurers, the more likely this potential will be fulfilled.