Challenges facing by Micro-Insurance, as a new and unknown concept in the insurance market Case of Albania

Abstract

Micro-insurance is a form of insurance, not being separated from traditional insurance, but which is mainly aimed at low-income individuals. This form of insurance applies to developing countries, where the level of population income is below the average level and where the low-income individuals occupy the highest percentage. The importance of micro-insurance in these countries applies to the fact that it includes in its packages, individuals who are excluded from traditional insurance schemes. Albania is also one of the developing countries, with low economic levels, where micro-insurance development is very important. This is also the focus of this work, highlighting the main factors that hinder the development of micro-insurance and the readiness of insurance companies or other interest parties in the application of micro-insurance. The analysis will be done through the drafting of a detailed questionnaire, addressed to 12 insurance companies operating in the country. Currently, there is no micro-insurance product in the insurance market and as such the need arises for a market analysis to study factors influencing and at the same time training and practices for insurance companies to get to know more about the term. AFSA, the entity regulatory has the main role in this process, which must undertake the strategy and practice to promote interest parties in the development of micro-insurance and the protection of low-income individuals. The results achieved in this paper support the hypothesis raised, where the factors that hinder the development of micro-insurance in the country are: high premium costs, the non-existence of a group of experts in the design of its products and the non-favourable level of technology and innovation.