_______________________________________________________________

_______________________________________________________________

Report Information from ProQuest

March 12 2014 02:10 _______________________________________________________________

12 March 2014

ProQuest

Table of contents
1. The demand for micro insurance in Ghana.................................................................................................. 1

12 March 2014

ii

ProQuest

Document 1 of 1

The demand for micro insurance in Ghana

Author: Akotey, Oscar Joseph; Osei, Kofi A; Gemegah, Albert ProQuest document link Abstract: The purpose of this paper is to identify the factors which influence the demand for micro-insurance services among the informal sector workers of Ghana who are quite vulnerable to various risks in the economy. The study adopts a quantitative technique based on primary data sampled randomly from 100 informal sector workers from four major market centers in Accra, Ghana. The probit regression model was used for the empirical investigation. Empirical investigation using the probit model indicates that premium flexibility, income level and nodal agency are significant determinants of micro-insurance demand. Insurance knowledge, expectation (trust) and marital status were also found to have positive and significant impact on the demand for micro insurance. Interestingly, the empirical analysis shows that formal education is not a significant determinant; rather one's level of insurance knowledge has a positive and significant impact on micro-insurance demand. Insurers must consider the nature of the cash-flow of informal workers in the design of premiums. The government must integrate micro insurance into its poverty reduction program. The micro-insurance market is very new and unresearched in Ghana. This foundational study is, therefore, very original and a most valuable guide to commercial insurance companies which want to venture into this huge untapped opportunity in the Ghanaian informal sector. Full text: 1 Introduction The first of the millennium development goals is to reduce by half the percentage of people suffering from abject poverty and starvation by the year 2015 ([18] Loewe, 2006; www.un.org/millenniumgoals/index.asp). Many developing nations are far from achieving this noble objective. One major cause of this is that millions of people in these countries are not adequately protected from such risk exposures like illness, unemployment, fire, old age, etc. which undermine productivity level and the capacity to create wealth ([18] Loewe, 2006). In 2001, the International Labour Office's (ILO's) conference of governments' representatives, employers and workers' organizations unanimously agreed that "the highest priority should be given to policies and initiatives which could bring social security to those who are not covered by existing systems" ([15] ILO, 2005). It was recognized during that same conference that only a small proportion of the population of developing countries benefit from social security schemes. This is because most of the social protection programs have been designed to favour workers of the formal sector ([18] Loewe, 2006). The concept of the informal economy according to the [16] ILO (1972) is defined as a: [...] way of doing things characterized by (a) ease of entry; (b) reliance on indigenous resources; (c) family ownership; (d) small scale operations; (e) labour intensive and adaptive technology; (f) skills acquired outside of the formal sector; (g) unregulated and competitive markets. The informal sector is also described as a "survivalist" economy. That is, its occurrence is the result of the natural desire of individuals to survive by engaging in different economic activities. The terms low income, poor and informal workers are used interchangeable throughout this paper. As stated earlier, the workers of the informal sector have practically no insurance cover of any kind. As a result, whenever any unforeseen event strikes these people who may otherwise be above the poverty line sink into the poverty trap ([11] Guha-Khasnobis and Ahuja, 2004). According to [6] Churchill (2007), "poverty and vulnerability reinforce each other in an escalating downward spiral". This is reiterated by [22] Matin et al. (1999) that: Poor households throughout the world face twin disadvantages. The first is the difficulty in generating regular income while the second is vulnerability to economic, political and physical downturns. Harder still, the two 12 March 2014 Page 1 of 11 ProQuest

disadvantages reinforce each other: Poverty is a source of vulnerability and repeated exposure to downturns reinforces poverty. Indeed, risks have significant influence in the lives of poor persons. Even though, informal workers and formal workers face similar risks such as death, illness, accidents, old age, etc. the informal sector workers are more vulnerable to risky events than the formal sector workers. Given the harsh economic conditions of the poor, risks impede their efforts from breaking the vicious cycle of poverty ([11] Guha-Khasnobis and Ahuja, 2004). Thus, any poverty reduction strategy, for example, the Ghana Poverty Reduction Strategy (GPRS), must empower the poor to deal with risk effectively ([13] Holzmann and Jorgensen, 2000; [34] Siegel et al. , 2001). Insurance is considered as one of the financial risk management strategies that can help the poor to deal with risk effectively. According to [3] Brown and Churchill (1999), "Insurance reduces vulnerability as households replace the uncertain prospect of large losses with the certainty of making small, regular premium payments". In the past, most insurers did not consider insurance as an option for the poor. For instance, serving the poor is considered to involve higher transaction costs, immense efforts and time. Again, low-income households are regarded as persons who are unable to afford regular insurance premiums. For others the poor is uninsurable because of the various risks they face, some of which are mass co-variant risks ([11] Guha-Khasnobis and Ahuja, 2004). However, the examples of India have shown that the poor have the capacity to make small periodic contributions as premiums to insure them against risks. In addition, they are insurable because the risks they face are idiosyncratic and predictable and that there are cost-effective methods of providing insurance to them ([11] Guha-Khasnobis and Ahuja, 2004). An aspect of insurance for managing risks among low-income households is micro insurance. Micro insurance is the defense of workers of the informal economy against specific risks in exchange for regular premium payments in proportion to the probability and cost of the risk involved ([6] Churchill, 2007). It is considered by many stakeholders such as the ILO as an invaluable instrument to improve upon the social security of lowincome households. Micro insurance schemes are operated in different parts of the world especially in developing countries. They protect low-income earners against various risks such as health risks, life-cycle risks, property damage, third-party liability and harvest failure ([18] Loewe, 2006). Generally, insurance penetration in Ghana is very low with about 1.6 per cent patronage as compared to about 5 per cent in Ivory Coast, 8 per cent in Namibia and 16 per cent in South Africa ([38] National Insurance Commission, 2008). This indeed translates into the incidence of very low micro-insurance provision in Ghana. In the 1980s, a number of insurance firms sold the susu-type[1] of micro-insurance products to the public. Unfortunately, most of them failed due to difficulties with premium collection as well as the high lapse rate of policies ([38] National Insurance Commission, 2008). Currently, there are a few well-structured micro-insurance products being sold by a few insurance companies. An example is the Anidaso Policy being sold by Gemini Life Insurance Company through selected rural banks and micro-finance institutions (MFIs). Unfortunately, most of these products have very few policyholders. There is, therefore, the need to find methods of getting many Ghanaians especially the low-income earners to subscribe to micro-insurance policies. Identifying the potential demand for micro-insurance products particularly by the low-income group should be of interest in all economies. The aim of this paper, therefore, is to identify the potential demand for micro-insurance products in Ghana particularly by the low-income group. The study is important given that the Ghanaian economy is highly dominated by the informal sector, which provides over 85 per cent of the manufacturing employment in Ghana ([36] Steel and Webster, 1991). The rest of the paper is divided as follows: Section 2 reviews the literature on the determinants of micro insurance. Section 3 deals with the methodology of the paper while Section 4 discusses the results. Section 5 concludes the paper. 2 Literature review 12 March 2014 Page 2 of 11 ProQuest

Determinants of demand for micro insurance Premium flexibility One important factor that encourages informal sector workers to demand micro insurance is the flexible payments and collection of affordable premiums. Since most of the informal workers do not have regular income, providing insurance to them requires the proper structuring of its price (premiums) in terms of cost, flexibility of payments and ease of collection. It is, therefore, very important that the timings of premium collection is structured to coincide with the cash inflows of low-income households ([11] Guha-Khasnobis and Ahuja, 2004; [35] Sinha, 2002; [37] Tenkorang, 2001). This point is reiterated by [32] Sebstad et al. (2006) that, micro-insurance demand studies that take into consideration the cash flows of the informal sector can be valuable in designing premium payment systems. This is because past studies have proved that microinsurance schemes can run into serious difficulties when premium payment options do not coincide with the cash flow of low-income households ([11] Guha-Khasnobis and Ahuja, 2004; [32] Sebstad et al. , 2006; [17] Leftley, 2002). The level of income [1] Beenstock et al. (1986), [4] Browne and Kim (1993) and [27] Outreville (1996) claimed that the capacity to afford an insurance premium is directly connected to one's level of income. However, the capacity of lowincome households to afford insurance services is not only related to the level of income but also the proper management of their financial resources has a remarkable impact on their access to micro insurance ([23] Matul, 2005). Nodal agency [11] Guha-Khasnobis and Ahuja (2004) assert that a nodal agency is a must in the provision of a cost-effective micro insurance that addresses the most important needs of low-income households. A nodal agency could be any of the civil society associations such as community-based organizations (CBO), women's groups, informal economy trade unions, non-governmental organizations (NGOs), MFIs, micro-entrepreneurs associations and so forth. Such organizations being aware of the specific needs of their members can promote their access to micro-insurance services. The functions of a nodal agency include product design, premium collection, distribution and the control of adverse selection as well as moral hazard ([11] Guha-Khasnobis and Ahuja, 2004). Expectations Under expectation, we consider issues such as trust, prompt payment of claims and the expected benefits or value of micro-insurance products. Trust is a very important variable that influences the decision of informal workers most of whom are low-income earners to subscribe to micro insurance. For instance, if low-income earners trust that insurers will honour their legal responsibilities by making prompt payments of claims when necessary, then they will be encouraged to buy micro-insurance products ([25] McCord, 2008). Insurance knowledge Low-income households think that they do not require insurance. This is probably due to lack of confidence in insurers and poor understanding of the risk-pooling concept. Previous experience with micro insurance shows that many people do not understand the concept of insurance and how it works. In some cases, the views of poor people about insurance are negative. They see it as the reserve for the rich; something that is irrelevant, too expensive or even unfair ([26] McCord and Osinde, 2005; [8] Cohen and Sebstad, 2005; [21] Manje and Churchill, 2002; [12] Herrera and Miranda, 2004; [23] Matul, 2005; [25] McCord, 2008). 3 Methodology Data The primary data for the study was obtained through a questionnaire. The respondents comprised of 100 informal workers who were randomly selected from four major market centers of Accra, the capital city of Ghana. These markets were the Legon market, Madina market, Makola market and the Kantamato market. 12 March 2014 Page 3 of 11 ProQuest

These market centers were chosen because of access to data and recent fire outbreaks in these markets. The questionnaire was pre-tested at the Legon market. This informed the final design of the questionnaire. Among the informal workers in these markets, three major groups of market sellers were randomly sampled to form the sample population. The first group was made up of agricultural products' sellers such as vegetables and fruits sellers, crops sellers, fish sellers and butchers. The second group was made up of chop bar[2] operators, and finally, provisions[3] sellers. These three groups of informal workers were selected not only because they possess the typical characteristics exhibited by the informal sector workers but they also have immovable assets in the market centers and are thus highly exposed to various physical hazards such as fire, flood, theft, etc. Most of the questions were precoded with numerical values and were measured on a five-point Likert scale. Specification of the probit model The probit model is used to analyse an econometric framework that has dummy dependent variables. An example is our objective to evaluate the factors that determine demand for micro insurance. If the observed dummy variable, y, is whether or not the person will buy a micro-insurance product, y* would be defined as "propensity" or "ability" to buy micro-insurance products. Thus, there is a "desire" and "ability" involved ([19] Maddala, 2005). When a person's desire is greater than zero (y*>0) the person demands micro insurance. The problem is that we cannot observe the desire of a particular person; rather we only observe whether or not a person demands micro insurance. We can, therefore, define a dummy variable Y as follows: Equation 1 [Figure omitted. See Article Image.] Thus, we observe Yi, such that Yi is equal to one (1) if a person demands micro insurance otherwise zero (0). Given this setup, we now turn to the question of interest: what is the probability that a person demands micro insurance? It is simply the probability that the person's desire is greater than zero (y*>0): Equation 2 [Figure omitted. See Article Image.] In this formulation, what we observe, Yi , is generated by the following rule: Equation 3 [Figure omitted. See Article Image.] Equation 4 [Figure omitted. See Article Image.] In this example y* (DEMAND*) is known as a latent variable or index variable. It is called a latent variable because it is unobserved, unlike, Yi (DEMAND), which we actually observed. Thus, the probit model assumes the existence of an underlying latent dichotomous realization. The latent variable, yi * , is, therefore, defined as: Equation 5 [Figure omitted. See Article Image.] where y* is desire which is unobserved, w[variant prime] represents the independent variables, represents the co-efficient of the explanatory variables and e is the error term which is distributed as normal variates (standard normal distribution). Thus, our model to investigate the informal economy's workers demand for micro insurance is given as follows: Equation 6 [Figure omitted. See Article Image.] where, 1 , 2 , 3 , 4 , 5 , 6 , 7 and 8 are the co-efficients of the respective independent variables. DEMANDMI represents demand for micro insurance and e is the error term. Estimation method Since the dependent variable is not continuous but discrete, we did not use the ordinary least square method. Rather we used the maximum likelihood estimation (MLE) method. The MLE is the standard approach for estimating a discrete choice such as the probit model. Definition and measurement of the variables Apart from the dependent variable and the AGE variable, the other independent variables were measured on a five point Likert scale where very big is 5 and very small is 1. The scale allowed the respondents to evaluate the possible impact of a particular research variable on their insurance purchase decisions. That is, the Likert scale enabled the respondents to indicate the extent to which they agreed or disagreed about how a particular factor can or cannot influence their micro-insurance demand decision:

DEMAND MI represents demand for micro insurance. It is a binary variable, which takes the value of one if the
respondent is willing to buy micro-insurance products and zero if otherwise. That is, it measures whether or not 12 March 2014 Page 4 of 11 ProQuest

an informal worker will buy a micro-insurance product.

PREM is an independent variable and measures how flexibility in premium collection can urge low-income
earners to access micro-insurance products.

INCOME is an explanatory variable which measures how an increase in the income of a respondent will
influence his/her micro-insurance purchase decision.

INSUKN is an independent variable and measures how one's level of insurance (including product) knowledge
may influence his/her micro-insurance purchase.

EXPEC it measures the impact of informal sector workers' perception of insurers on the demand for micro
insurance.

NODAL is an intermediary between insurers and policyholders and it measures how such agents facilitates the
subscription of micro-insurance services.

AGE this is a measure of the age of the owner of an informal business. MARITAL STATUS the marital status variable is a measure of whether a person is single, married, divorced or
widowed. It was pre-coded on a scale of 1-5.

EDUCATION the education variable measures the level of formal education of a respondent. It was measured
on a scale of 1-5, where; none=1; basic=2; secondary=3; vocational=4; tertiary=5. 4 Results Descriptive statistics Table I [Figure omitted. See Article Image.] shows the descriptive statistics of the study. The mean for the demand for micro insurance is 71 per cent and its SD is 0.456. This shows that on the average, 71 per cent of the 100 respondents were interested to buy micro-insurance products. The formal education variable has a medium of 2 and a SD of 0.946. This shows that most of the respondents have basic education. This means that most of the informal workers may be able to read and write. Such level of education may have a positive impact on their understanding of the concepts of insurance, and insurers will have to make a positive use of this in their product design. The mean value of 33.56 for the age variable indicates that most of the respondents were youthful and that their average age is approximately 34 years. This indicates that many workers in the informal economy are in their productive years and thus will need insurance services to secure their future. The marital status' medium value of 2 is an indication that most of the respondents were married couples and that, such households would like to secure their families' future through micro-insurance services. The median of premium flexibility, income[4] , nodal agency, insurance knowledge and expectation were four. On the scale which was used to measure these variables, four refers to "big". Therefore, the mean of four indicates that most of the respondents agree that these variables have significant impact on the demand for micro-insurance services. Estimation of the model The results of the probit regression (Table II [Figure omitted. See Article Image.]) show that all the independent variables (except AGE and EDUCATION) are positive and statistically significant. Premium flexibility and the demand for micro insurance From Table II [Figure omitted. See Article Image.] the premium flexibility variable is positive and statistically significant at the 10 per cent significance level. Usually, the price of a product, in this case the premium, has an inverse relationship with demand. So, one would have expected the premium to be negative. However, it is positive in this case. The reason is that under this model, our interest is not to investigate the relationship between premium and demand, rather and most importantly, how flexibility in premium setting and collections can urge the workers of the informal sector to demand micro-insurance services. Premium flexibility means that the setting and collections of the premiums are structured to meet the timing and the unique nature of the income flow of the informal sector taking into consideration the seasonal nature or the 12 March 2014 Page 5 of 11 ProQuest

erratic flow of their income. Thus, the more flexible the premium the higher the demand for micro insurance. Most studies, which have analyzed the demand for micro insurance have established that premium flexibility is positive and significant. For example, [11] Guha-Khasnobis and Ahuja (2004), after a detailed analysis of the effect of premium flexibility on the demand for micro insurance in India stated: In the case of the low income people for whom premium constitutes a significant proportion of their income, flexibility in premium collection has a bearing on their joining or not joining an insurance scheme, and hence, on the membership size. A number of researches on Africa have revealed that immediate cash payments of premiums do not encourage the demand for insurance services ([37] Tenkorang, 2001). [35] Sinha (2002) also found that the rural poor get lump sums during the farming seasons (harvest time), but the urban poor get small sums of money quite regularly, and this has an impact on their demand for insurance services. These findings about the impact of premium flexibility on the demand for micro insurance were corroborated by some of the respondents during the survey. According to some, they have stopped patronizing the life insurance product of a certain insurance company because the insurer no longer visits their work place to collect the premiums regularly. The level of income and the demand for micro insurance The income variable is statistically significant and positively related to micro-insurance demand. This result corroborates the findings of many researchers on the relationship between income and the demand for insurance. According to [14] Hwang and Gao (2003), income is statistically significant and positively correlated with life insurance consumption in China. Many other authors who have analysed the insurance purchase decision have found income as a significant factor ([31] Scotton, 1969; [28] Propper, 1989; [30] Savage and Wright, 1999; [2] Bhat and Jain, 2006). Nodal agency and the demand for micro insurance The nodal agency variable is also positive and statistically significant at the 5 per cent level of significance. Nodal agencies (e.g. market women's association) being local- or CBO are seen by informal workers as "their own" with similar interests and with a common background. Such perceptions have a positive impact on the attitude of the low-income earners to demand micro-insurance services. Furthermore, the involvement of a nodal or an intermediate agency such as NGO and CBO as a mouthpiece of the informal sector helps in the collections of the premiums and processing of claims on behalf of the informal workers. The engagement of a nodal agency can reduce the transactional costs, adverse selection and moral hazards associated with the micro-insurance industry. Insurance knowledge and the demand for micro insurance The level of insurance knowledge was found to have a significant influence on micro-insurance demand. This means that if the informal sector is well informed and educated about the concept of insurance, they will see the value of insurance services, which will impact positively on their demand for micro-insurance services. This calls for an improvement in the level of information given about insurance products to the market particularly, to the informal economy. Such information should be designed to meet the unique needs and backgrounds of the informal sector. The challenge will be to provide this education on a broad scale and in a manner that addresses the needs of different people with varying degrees of literacy ([25] McCord, 2008)[5] . Formal education and the demand for micro insurance Although the level of one's knowledge about insurance (the insurance knowledge variable) is positive and significant, the level of one's formal education is not statistically significant. This means that one's level of formal education is not enough to induce the person to purchase micro-insurance products. Instead, the person's proper understanding and appreciation of the concept of risk pooling or the value of insurance is the most vital factor. Previous studies ([10] Ferber and Lee, 1980; [5] Burnett and Palmer, 1984; [4] Browne and Kim, 1993; [27] Outreville, 1996) also offer inconclusive evidence on the effect of education on insurance consumption, 12 March 2014 Page 6 of 11 ProQuest

Expectations and the demand for micro insurance Expectation refers to the impact of trust, prompt payment of claims and the value of micro-insurance products to low-income earners. It measures the informal workers' perception of insurers. Our result shows that an improvement in the perception of low-income earners about insurers has a positive and significant impact on the demand for micro insurance. [2] Bhat and Jain (2006) also found perception to be significant and positively associated with health insurance purchase. For instance, if low-income earners trust that insurers will honour their contractual responsibilities by making timely payments of claims when necessary, then they will have the confidence to take up microinsurance cover ([25] McCord, 2008). Marital status and micro-insurance demand The marital status variable is positive and significant statistically at the 10 per cent significance level. The implication is that, a married couple will demand various micro-insurance services such as life insurance, to secure their family's future so that in the event of death, the family can have some financial assistance in the form of the insurance claims to depend upon. 5 Conclusions The aim of this paper is to determine the factors of demand for micro-insurance in Ghana. Using structured interview of 100 participants from four major markets in Accra, as well as the probit model to analyse the econometric framework, the study establishes that demand for micro insurance in Ghana is determined by introducing a flexible premium payment system. The study also establishes that nodal agency system is indispensable for the demand for micro insurance in Ghana. Other important determinants of demand include trust that claims will be paid by the insurance companies expeditiously when due as well as establishing proper educational campaign of what micro insurance is all about. Income also proved statistically significant in determining the demand for micro insurance in Ghana. The survey shows considerable interest by Ghanaians in micro insurance. The potential demand for the micro-insurance products is very high. Recommendations for policy directions Micro insurance is an effective financial risk management instrument that can empower the informal sector to reduce the twin disadvantages of vulnerability to risk and poverty. Thus, the factors that influence low-income households to demand micro insurance must be taken into consideration by the stakeholders in the insurance industry in their product development, policy formulations and implementation. The low patronage of insurance in Ghana can be increased drastically if the high unexploited market in the informal sector is targeted and developed. Insurance companies can increase their market shares, if they take into consideration the seasonal cash flow of the informal sector in setting and collecting premiums. The role of a nodal agency which is a major determinant of micro-insurance demand can reduce transactional costs and the tendencies of moral hazard and adverse selection. Thus, insurance companies should liaise with local or community based organizations such as churches, market women societies, NGOs, MFIs, rural and community banks in order to provide cost-effective micro-insurance services. The insurance companies can help the local association to form nodal agencies by giving them capacity training in issues covering premium payments and collections, claims processing and the duties of the parties involved in an insurance contract. Furthermore, insurers must work hard to create a positive public perception about their operations. This can be done through the proper explanation of the benefits of micro-insurance products, the legal obligations of the parties involved in the insurance contractual relationship and an explicit explanation of when a policyholder can make a claim and the procedure for making such claims. Such initiatives will improve the trust and perception of the informal workers about insurers and this would eventually impact positively on the demand for micro insurance. The Government of Ghana can achieve the aims of its poverty reduction strategy if micro insurance is integrated into the GPRS. Sometimes poverty reduction initiatives encounter major setbacks when the target 12 March 2014 Page 7 of 11 ProQuest

groups and individuals suffer from drought, flood, fire outbreaks or the death of the breadwinner in the family. These risks push the low-income households who may otherwise be above the poverty line further below the poverty line thereby eroding any meaningful gains made by the poverty reduction program. It is, therefore, imperative for the government to make micro insurance a central pillar in its poverty reduction program, by providing a well targeted and packaged educational program about micro insurance to the informal sector. The Ghana Insurance Commission should also consider appropriate legislation that will encourage insurance companies to venture into the micro-insurance business. Such legislation can take the form of providing subsidies or tax exemptions to insurers that provide a certain level of micro-insurance services. Footnote 1. Informal savings by low-income households. 2. Chop bar refers to local restaurant. 3. Provisions are used here to consist of household consumables, textile (second hand clothes), etc. 4. The medium value of 4 for the level of income indicates micro-insurance purchase. 5. [25] McCord (2008) is a collection of the opinions of experts in micro insurance and this statement is attributed to Monique Cohen Founder and President of Micro-finance Opportunities. References 1. Beenstock, M., Dickinson, G. and Khajuria, S. (1986), "The determination of life premiums: an international cross-section analysis 1970-1981", Insurance: Mathematics and Economics, Vol. 5, pp. 261-70. 2. Bhat, R. and Jain, N. (2006), Factoring Affecting the Demand for Health Insurance in a Micro Insurance Scheme, Indian Institute of Management, Ahmedabad. 3. Brown, W. and Churchill, C. (1999), "Providing insurance to low-income households: part I: a primer on insurance principles and products", Microenterprise Best Practices Project, DAI/USAID, Bethesda, MD, pp. 192. 4. Browne, M.J. and Kim, K. (1993), "An international analysis of life insurance demand", Journal of Risk and Insurance, Vol. 60, pp. 616-34. 5. Burnett, J.J. and Palmer, B.A. (1984), "Examining life insurance ownership through demographic and psychographic characteristics", Journal of Risk and Insurance, Vol. 51, pp. 453-67. 6. Churchill, C. (2007), "Insuring the low-income market challenges and solution for commercial insurers", The Geneva Papers, Vol. 32, pp. 401-12. 8. Cohen, M. and Sebstad, J. (2005), "Reducing vulnerability: the demand for microinsurance", Journal of International Development, Vol. 17 No. 3, pp. 397-474. 10. Ferber, R. and Lee, L.C. (1980), "Acquisition and accumulation of life insurance in early married life", Journal of Risk and Insurance, Vol. 47, pp. 713-34. 11. Guha-Khasnobis, B. and Ahuja, R. (2004), "Extending formal insurance to the informal economy workers in India", Parallel Session 3.2, EGDI and UNU-WIDER. 12. Herrera, C. and Miranda, M. (2004), "Columna Guatemala", CGAP Working Group on Microinsurance. Good and Bad Practices, Case Study No. 5, December. 13. Holzmann, R. and Jorgensen, S. (2000), "Social risk management: a new conceptual framework for social protection and beyond", Social Protection Discussion Paper No. 0006, The World Bank, Washington, DC. 14. Hwang, T. and Gao, S. (2003), "The determinants of the demand for life insurance in an emerging economy - the case of China", Managerial Finance, Vol. 29 Nos 5/6. 15. ILO (2005), "India: an inventory of micro insurance schemes", Strategies and Tools Against Social Exclusion and Poverty (STEP) Programme, Working Paper No. 2, ILO, Geneva. 16. ILO (1972), Employment, Income and Equality: A Strategy for Increasing Productive Employment in Kenya, ILO, Geneva. 17. Leftley, R. (2002), An Overview of Insurance Product Design Within the Opportunity International Network, 12 March 2014 Page 8 of 11 ProQuest

Opportunity International, Technical Services Division. 18. Loewe, M. (2006), "Downscaling, upgrading or linking?", Ways to realise micro-insurance International Social Security Review, Vol. 59 No. 2, pp. 37-58. 19. Maddala, G.S. (2005), Introduction to Econometrics, 3rd ed., Wiley, New York, NY, pp. 317-27. 21. Manje, L. and Churchill, C. (2002), "The demand for risk managing financial services in low-income communities evidence from Zambia", Working Paper No. 31, Social Employment Sector, ILO, Geneva. 22. Matin, I., Hulme, D. and Rutherford, S. (1999), "Financial services for the poor and poorest: deepening understanding to improve provision", Finance and Development Research Programme Working Paper Series, Paper No. 9, Institute for Development Policy and Management, University of Manchester, Manchester. 23. Matul, M. (2005), "Demand for microinsurance in Georgia: quantitative study results", presented at the 8th Annual Conference on Microfinance Institutions, Bucharest, 26-28 May 2005, Microfinance Centre for Central and Eastern Europe and the New Independent States, Warsaw, pp. 1-98. 25. McCord, M. (2008), "Visions of the future of micro insurance and thoughts on getting there", Micro Insurance Note No. 9, USAID/DAI, Washington, DC, pp. 1-35. 26. McCord, M. and Osinde, S. (2005), "Reducing vulnerability: the supply of health insurance in East Africa", Journal for International Development, Vol. 17 No. 3, pp. 327-81. 27. Outreville, J.F. (1996), "Life insurance markets in developing countries", Journal of Risk and Insurance, Vol. 63, pp. 263-78. 28. Propper, C. (1989), "An econometric analysis of the demand for private health insurance in England and Wales", Applied Economics, Vol. 21 No. 6, p. 77. 30. Savage, E. and Wright, D. (1999), "Health insurance and health care utilization: theory and evidence from Australia 1989-90", Mimeograph B2 - Mimeograph, University of Sydney, Sydney. 31. Scotton, R.B. (1969), "Membership of voluntary health insurance", Economic Record, Vol. 45, pp. 69-83. 32. Sebstad, J., Cohen, M. and McGuinness, E. (2006), "Guidelines for market research on the demand for micro insurance", For USAID under the Accelerated Microenterprise Advancement Project (AMAP ). 34. Siegel, P., Alwang, J. and Canagarajah, S. (2001), Viewing Micro-insurance as a Risk Management Tool, Social Protection Discussion Paper No. 115, The World Bank, Washington, DC. 35. Sinha, S. (2002), Strength in Solidarity: Insurance for Women Workers in the Informal Economy, Self Employed Women's Association (SEWA), Ahmedabad. 36. Steel, W.F. and Webster, L.M. (1991), "Small enterprises in Ghana: responses to adjustment", Industry Series Paper 33, The World Bank Industry and Energy Department, Washington, DC. 37. Tenkorang, D.A. (2001), "Health insurance for the informal sector in Africa: design features, risk protection and resource mobilisation", CMH Working Papers Series, Paper No. WG3:1, available at: www.un.org/millenniumgoals/index.asp. 38. National Insurance Commission (2008), "The state of micro insurance in Ghana", paper presented by the Insurance Commissioner at a Stakeholders Meeting on Micro Insurance in Ghana, 7 August 2008, Accra. Further Reading 1. Churchill, C.F., McCord, M., Roth, J. and Liber, D. (2003), Making Insurance Work for Microfinance Institutions: A Technical Guide to Developing and Delivering Microinsurance, International Labour Organisation, Geneva. 2. Cohen, M. and Young, P. (2007), "Using microinsurance and financial education to protect and accumulate assets", Reducing Global Poverty, The Case for Assets Accumulation, The Brookings Foundation, Washington, DC. 3. Maddala, G.S. (1983), Limited-dependent and Qualitative Variables in Econometrics, Cambridge University Press, Cambridge. 4. McConnell, C.R. and Brue, S.L. (2008), Economics: Principles, Problems and Policies, 17th ed., McGraw-Hill, 12 March 2014 Page 9 of 11 ProQuest

New York, NY, p. 641. 5. Rejda, G.E. (2008), The Principles of Insurance, 10th ed., Pearson, Harlow, pp. 19-20. 6. Sichei, M. (2008), Econometrics Theory and Practice Part Two: Topics in Micro-econometrics, CMPA, Washington, DC. Appendix About the authors Oscar Joseph Akotey is a Lecturer in the Department of Economics and Business Administration, Catholic University College of Ghana, Sunyani, Ghana. Kofi A. Osei is a Senior Lecturer in the Finance Department, University of Ghana Business School, Accra, Ghana. Kofi A. Osei is the corresponding author and can be contacted at: kaosei@ug.edu.gh Albert Gemegah is a Senior Lecturer in the Finance Department, University of Ghana Business School, Accra, Ghana. AuthorAffiliation Oscar Joseph Akotey, Department of Economics and Business Administration, Catholic University College of Ghana, Sunyani, Ghana Kofi A. Osei, The Finance Department, University of Ghana Business School, Accra, Ghana Albert Gemegah, The Finance Department, University of Ghana Business School, Accra, Ghana Illustration Equation 1 Equation 2 Equation 3 Equation 4 Equation 5 Equation 6 Table I: Descriptive statistics of regression variables Table II: Results of the probit regression model Subject: International; Studies; Insurance industry; Developing countries--LDCs; Poverty; Supply & demand; Classification: 9177: Africa; 9130: Experimental/theoretical; 8200: Insurance industry; 1200: Social policy Publication title: The Journal of Risk Finance Volume: 12 Issue: 3 Pages: 182-194 Publication year: 2011 Publication date: 2011 Year: 2011 Publisher: Emerald Group Publishing, Limited Place of publication: London Country of publication: United Kingdom Publication subject: Business And Economics--Banking And Finance ISSN: 15265943

12 March 2014

Page 10 of 11

ProQuest

Source type: Scholarly Journals Language of publication: English Document type: Feature Document feature: References Tables Equations DOI: http://dx.doi.org/10.1108/15265941111136932 ProQuest document ID: 868254882 Document URL: http://search.proquest.com/docview/868254882?accountid=136934 Copyright: Copyright Emerald Group Publishing Limited 2011 Last updated: 2011-07-14 Database: ABI/INFORM Complete

_______________________________________________________________
Contact ProQuest

Copyright 2014 ProQuest LLC. All rights reserved. - Terms and Conditions

12 March 2014

Page 11 of 11

ProQuest