Client Perceptions of the Value of Microinsurance: Evidence from Southern Ghana

Abstract

The uptake of microinsurance in developing countries falls short of projections, which has recently made stakeholders focus on client value. However, empirical research on what constitutes client value in microinsurance has been limited. As a starting point for further investigations, we draw a first conceptual sketch of the dimensions of client value. Our analysis is based on qualitative data from focus group discussions among both existing and potential clients of a micro life insurance in southern Ghana. Using a multidimensional approach, we show that client value is based on the perceived quality, costs and consumption outcome, as well as the emotional and social value of micro life insurance. In their value judgments, focus group participants particularly emphasize the quality of customer service provision, the (expected) insurance benefits, and positive emotions associated with insurance coverage. The evaluation of the value of the microinsurance under study is mixed. We therefore also investigate why clients form the value perceptions they do. This investigation finds that large discrepancies between people’s expectations and experiences reduce the perceived value of the insurance product. It shows that contextual factors, such as clients’ knowledge about insurance, their interaction with peers, and the availability and effectiveness of alternative risk management options, largely shape whether they perceive high or low value in micro life insurance.