Abstract
Purpose
The low formal insurance usage in Zambia, which exposes low-income earners to vulnerabilities, raises concerns about risk management across the Zambian population. To better understand the market segment and provide relevant products, it is imperative to understand consumers’ perspectives and their motivations for purchasing microinsurance. This paper explores the factors that affect the demand for general and life microinsurance.
Design/methodology/approach
The paper employs a qualitative research approach to explore the drivers of microinsurance uptake in Zambia. A thematic data analysis technique was employed to analyse semi-structured interviews from a purposive sample of 15 consumers of microinsurance products in Zambia.
Findings
From the thematic analysis, the paper extracted attitudes towards risk, insurance knowledge, customer expectations and exogenous factors as the drivers of microinsurance demand in Zambia. Positive drivers of demand include having simplified claims processes and greater insurance awareness by incorporating attitudes towards risk in the messaging about the products available. Microinsurance is also negatively impacted by changes in exogenous factors such as inflation which erodes income and consequently reduces insurance affordability. While the effects of the COVID-19 pandemic had an adverse effect on microinsurance demand as interactions between providers and consumers were restricted, it was also found to be an important driver of microinsurance demand because it highlighted the importance of adequate coverage under unforeseen circumstances.
Practical implications
The findings provide important indicators for insurers in developing a microinsurance value proposition that suits the needs of consumers. Consumers use their past experiences and those of others to determine their attitude towards microinsurance. The paper outlines several implications for providers to improve microinsurance demand such as the use referral incentives to encourage more community members to purchase microinsurance, leveraging the use of testimonials from existing consumers to improve perceptions towards microinsurance and undertaking community-wide and in-person interventions in promoting the uptake of microinsurance. These interventions will positively strengthen attitudes towards insurance, build trust and improve demand.
Originality/value
As far as the authors are concerned, this paper presents novel insights to understand the consumer’s perspective on their demand for microinsurance in an emerging economy.
The low formal insurance usage in Zambia, which exposes low-income earners to vulnerabilities, raises concerns about risk management across the Zambian population. To better understand the market segment and provide relevant products, it is imperative to understand consumers’ perspectives and their motivations for purchasing microinsurance. This paper explores the factors that affect the demand for general and life microinsurance.
Design/methodology/approach
The paper employs a qualitative research approach to explore the drivers of microinsurance uptake in Zambia. A thematic data analysis technique was employed to analyse semi-structured interviews from a purposive sample of 15 consumers of microinsurance products in Zambia.
Findings
From the thematic analysis, the paper extracted attitudes towards risk, insurance knowledge, customer expectations and exogenous factors as the drivers of microinsurance demand in Zambia. Positive drivers of demand include having simplified claims processes and greater insurance awareness by incorporating attitudes towards risk in the messaging about the products available. Microinsurance is also negatively impacted by changes in exogenous factors such as inflation which erodes income and consequently reduces insurance affordability. While the effects of the COVID-19 pandemic had an adverse effect on microinsurance demand as interactions between providers and consumers were restricted, it was also found to be an important driver of microinsurance demand because it highlighted the importance of adequate coverage under unforeseen circumstances.
Practical implications
The findings provide important indicators for insurers in developing a microinsurance value proposition that suits the needs of consumers. Consumers use their past experiences and those of others to determine their attitude towards microinsurance. The paper outlines several implications for providers to improve microinsurance demand such as the use referral incentives to encourage more community members to purchase microinsurance, leveraging the use of testimonials from existing consumers to improve perceptions towards microinsurance and undertaking community-wide and in-person interventions in promoting the uptake of microinsurance. These interventions will positively strengthen attitudes towards insurance, build trust and improve demand.
Originality/value
As far as the authors are concerned, this paper presents novel insights to understand the consumer’s perspective on their demand for microinsurance in an emerging economy.
| Original language | English |
|---|---|
| Pages (from-to) | 1-18 |
| Number of pages | 18 |
| Journal | Journal of Entrepreneurship and Public Policy |
| DOIs | |
| Publication status | Published - 12 Mar 2025 |