Adoption Of Insurance Research Articles

Adoption of Crop Insurance by Smallholder Farmers: Farm-Level Evidence from India

The paper aims to analyse the extent and determinants of smallholder farmers’ adoption of crop insurance. The study conducted a primary survey and collected data from farmers in a drought-prone area of Karnataka state in India using a structured questionnaire. The study has applied a binary logistic regression model to identify the determinants of crop insurance adoption. Empirical results reveal that though most farmers experienced crop loss, only a small percentage subscribed to crop insurance regularly. Lack of money to pay premiums and lack of information are the most common reasons for not subscribing to crop insurance schemes. Further, farmers feel the premium is expensive and do not receive the promised compensation due to the stringent eligibility rules. Most farmers who received compensation think the money is inadequate to cover the cultivation cost. Farmers feel each farm should be treated as a unit against the area-based insurance concept, and more crops should be brought under insurance. They also highlighted the need to further subsidise the premium. Results of the logistic regression confirm that socially marginalised groups and farmers practising agriculture as an ancestral profession are less likely to insure their crops.

Agricultural resilience: Impact of extreme weather events on the adoption of rural insurance in Brazil

Brazil’s agricultural, livestock, and forestry production is essential, feeding more than 10% of the global population. However, climate change and extremes affect quality and production, challenging the Sustainable Development Goals of eradicating hunger and poverty. Extreme weather events generate economic and social costs, driving the use of adaptation strategies, with rural insurance being one of the main instruments to manage these risks. This study analyzes the impact of extreme weather events on rural insurance contracting in Brazil, using daily precipitation and temperature data to calculate extreme weather indices and perform panel regressions. The analysis of Minimum Comparable Areas (MCAs) between 2006 and 2016 showed that events such as “Frost” and “Hot Days” significantly increased insurance contracting, especially in the South and Central-West regions. The results highlight the importance of extreme variables and the need to consider regional differences and insurance alternatives. Despite the importance of insurance, increasing financial unviability suggests the need for additional strategies, such as crop diversification, community solidarity, and conservation of agricultural practices.

Cognitive, affective, and normative factors affecting digital insurance adoption among persons with disabilities: A two-stage SEM-ANN analysis

This study evaluates the determinants of digital insurance adoption among persons with disabilities (PWDs) using the cognitive, affective, and normative (CAN) model. The study considers (i) cognitive factors such as perceived credibility, perceived knowledge, perceived usefulness, perceived complexity, and facilitating conditions; (ii) affective factors including technology anxiety and technology pleasure; and (iii) normative factors encompassing social influence. Moreover, it explores the relationship between perceived complexity and behavioral intention (BI) to adopt digital insurance among PWDs, as mediated by perceived knowledge. This study employs a two-stage hybrid structural equation modeling–artificial neural network (SEM-ANN) approach to test the hypothesis, and data from 323 physically challenged participants were collected. Empirical results show that all factors, except for perceived complexity and technological anxiety, significantly predict BI adoption of digital insurance among PWDs, whereas perceived usefulness was found to have the highest impact on BI. Although perceived complexity affects perceived knowledge, it does not significantly mediate the relationship between complexity and BI. This study expands on the CAN model and provides practical insights for PWDs in adopting digital insurance.

Agricultural Insurance Adoption in the Context of Climate Change: Influencing Factors in Benin (West Africa)

Background: Agricultural insurance has emerged as an effective climate risk management strategy in many African countries, but its adoption is still low in Benin. This study seeks to understand farmers¢access and perception of agricultural insurance, while analyzing the factors that affect its adoption in the municipality of Ouèssè in Benin. Methods: Using the method of snowball sampling, the research team collected data from 112 household heads, from six major maize-producing villages. With the data from focus group discussions and a structured questionnaire, we performed descriptive statistics and used the logistic regression model to analyze the factors influencing farmers' agricultural insurance adoption. Result: Our investigations revealed that almost all (95%) of the respondents have received agricultural insurance information at least once and about 94% of them found insurance useful for effective agricultural risk management. However, most of respondents (66.5%) lacked knowledge of loss assessment methods and 52% of them said that the insurance premium was too high for farmers. Most (95%) of the respondents who subscribed to agricultural insurance also received agricultural credit. The binomial logistic regression analysis revealed that adopting agricultural insurance is positively influenced by the farmers' perception of the insurance, educational level, household size andaccess to agricultural credit. Implementing strategies that consider these influencing factors andpromote awareness, while building capacity and trust, could facilitate farmers' adoption of agricultural insurance, especially in countries like Benin, where agricultural insurance is relatively new.

Post-ACA health insurance decisions: A survey on risk attitudes and consumer confidence

Objective: This study investigates the reluctance of individuals in the United States to get health insurance, specifically examining the psychological and sociodemographic aspects that contribute to this reluctance within the Affordable Care Act (ACA) framework. The research objective is to ascertain the behavioral factors contributing to insurance hesitation and offer valuable perspectives for decreasing the number of individuals without health insurance and enhancing health security. Methodology: The study uses data from the 2022 Survey of Consumer Finances to analyze the impact of specific variables such as risk tolerance, consumer confidence, income, education, age, and marital status on health insurance coverage choices. We also address issues related to cost, perceived health requirements, previous experiences, and misunderstandings about eligibility. Conclusion: The study demonstrates that higher customer confidence, frequently associated with financial stability, decreases reluctance to obtain insurance. By contrast, individuals with more risk tolerance exhibit more hesitancy, opting to depend on internal resilience. Furthermore, substantial demographic disparities indicate the presence of several obstacles in acquiring comprehensive coverage. Implications and Recommendations: The results underscore the necessity of tailored policy interventions that address the unique requirements of different demographic groups. It is crucial to consider both psychological and sociodemographic aspects to promote insurance adoption and ensure universal health security. The present study makes a valuable contribution to the current body of literature by offering a comprehensive examination of health insurance hesitation following the Affordable Care Act (ACA) implementation.

Assessing farmers’ intention to adopt drought insurance. A combined perspective from the extended theory of planned behavior and behavioral reasoning theory

Agriculture in Mediterranean climates, such as that of southern Spain, is highly vulnerable to climate change, and particularly to hydrological drought. Financial instruments such as weather index-based insurance have been developed in response to increasing climate risks. In previous studies of intention to adopt this type of insurance, little attention has been paid to farmers’ underlying psychological motivations related to their perceptions of climate change, reasons for or against insurance adoption, attitudes toward insurance, subjective norms, or perceived control over the instrument. To comprehensively address this gap, a combined exploratory model based on the theory of planned behavior and behavioral reasoning theory is proposed. Specifically, the aim of this research is to analyze the psychological factors that determine farmers' intention to adopt drought insurance. The conceptual model is tested on a sample of 146 farmers from an irrigated area in the lower Guadalquivir region of Andalusia. The data are analyzed using partial least squares structural equation modeling (PLS-SEM). Contrary to expectations, the results of the study suggest that belief in climate change does not significantly influence the reasons for or against insurance adoption, nor the attitudes toward or perceived control over it. The recommendations drawn from this study can contribute to the design of more effective policies and communication strategies that address farmers' psychological perceptions and motivations, thereby helping to boost the adoption of drought insurance.

Determinants of life insurance purchase decisions among university students in Hanoi, Vietnam

This article aims to evaluate the factors affecting the decision to buy life insurance for students in Hanoi, including the variables: awareness of life insurance value, motivations to purchase, barriers to purchase, company brand, and life insurance consultant. A quantitative survey was utilized to take the students in Hanoi, Vietnam. The study uses SPSS 20 analysis software based on 351 valid responses. The multiple regression results show that all of these factors have significant effects. Accordingly, the barrier factor has a negative impact, decreasing the ability to buy life insurance. In contrast, other factors have a positive impact, such as exceptionally high awareness of value and purchase motivation, which have the most substantial impact. Consultants and company brands also promote students’ decision to buy life insurance. Insurance companies should focus on education, improving services, and building brands to increase the ability to purchase life insurance for students. In addition, raising awareness of the value of life insurance is also necessary for student customers. The findings suggest that targeted strategies addressing these key factors can effectively boost students' adoption of life insurance in Hanoi and Vietnam.

Willingness to Pay for Cattle Insurance in Nepal: A Double-Hurdle Model Perspective

Since the adoption of the Crop and Livestock Insurance Directives in 2013, the adoption of livestock insurance has gained popularity in Nepal. In the eight years since implementation, adoption rates have remained low, even with 80% government premium subsidies. This study uses a double-hurdle model for quantitative analysis and focuses on the determinants of willingness to pay (WTP) for cattle insurance. The research identifies significant factors influencing insurance adoption decision, including positive impacts from farmer’s age, education, livestock loss history, awareness of insurance, dairy farm income, number of cattle, and loan access. However, male gender, extensive cattle rearing experience, and larger households negatively affect willingness to insure. A number of factors affect premium determination, including age, size of household, livestock loss, off-farm income, number of cattle, and loan accessibility; on the other hand, factors that have a negative impact on premium levels include breed type, marital status, and revenue from dairy farms. According to the findings, the annual WTP for cattle insurance among dairy farmers varies from $48 to $71 (NRs. 6315-9341), with an average of $58 (NRs. 7631). Interestingly, the majority of farmers demonstrate their commitment to risk management by accepting premiums equal to 5% of the value of the cattle. The research contributes to understanding livestock insurance premiums in developing countries, specifically in Nepal, and suggests a scope for extending insurance programs, while also noting a gap in awareness among dairy farmers regarding government subsidy programs.

Determinants of Livestock Insurance Adoption by Dairy Cattle Farmers of Nawalpur District, Nepal

Livestock farming faces inherent vulnerabilities, such as disease outbreaks and natural disasters. The utilization of livestock insurance can play a crucial role in alleviating risks and uncertainties associated with farming practices, ultimately fostering security for farmers. The research was carried out purposively in Nawalpur district during 2022 to identify the factors affecting adoption of livestock insurance among dairy cattle farmers. One hundred and twenty dairy cattle farmers were selected randomly from the study area. Primary data were collected using pretested semi-structured interview schedule, Focus Group Discussion and Key Informant Interview. Descriptive statistics and probit model were used to interpret the findings. Findings from the research revealed that age, membership in farmer’s organization, contact with extension worker and rearing of improved breed were statistically significant in the adoption of livestock insurance. Extension agencies of government, non-governmental institution and insurance companies should primarily focus on farmers who are old aged, rear improved breed, participate in farmer’s organization and have regular contact with extension worker for better adoption.

Exploring Financial Knowledge and Consumer Confidence in Disability Insurance Decisions

This study examines the factors that affect the uptake of disability income insurance in the United States, specifically focusing on consumer confidence, financial knowledge, and human capital. Background: Disability income insurance is essential for maintaining financial stability as it provides income for individuals who are unable to work due to health issues. Despite its importance, the adoption of disability income insurance remains low, particularly among certain racial and demographic groups. Methods: Logistic regression analysis was conducted using data from the 2022 Survey of Consumer Finance to assess the relationships between consumer confidence, financial knowledge, human capital, and various sociodemographic factors. Controls for age, employment status, marital status, and race were included. Results: The analysis revealed significant racial disparities in insurance uptake. Asian participants exhibited the highest level of reluctance, while financial knowledge was found to positively correlate with insurance acquisition among Black individuals. Generational differences were also observed, with older White and Latino individuals demonstrating a lower inclination towards obtaining insurance. Conclusion: The findings underscore the importance of culturally sensitive financial education and policies tailored to diverse communities. Improving consumer confidence and financial literacy is crucial for increasing the uptake of disability income insurance, which can enhance economic resilience and well-being across various demographic groups in the United States.

Insights into earthquake insurance demand in high-risk regions: A case study of Turkey

Over the last three decades, earthquakes have caused approximately USD 1 trillion in economic damage globally. While earthquake insurance can help reduce this damage, there is a significant coverage gap, especially in emerging nations. This research focuses on Turkey, a nation with high vulnerability to seismic activity, to investigate the complex reasons for the low adoption of earthquake insurance. Utilizing a comprehensive set of indicators, including socioeconomic factors, real estate data, and earthquake hazards, this study applies multiple linear regression analysis across various districts. The findings reveal that insurance demand is influenced by peak ground acceleration, average household size, crude birth rate, and percentage of college graduates. While conventional factors such as marriage rate and home price per square have some impact, other expected indicators such as population growth and old age dependency do not show significant influence. By demonstrating how demographic, economic, and seismic risk indicators can predict insurance demand, this research offers fresh insights for policymakers and insurers to enhance their coverage strategies. This approach sheds light on the under-examined dynamics of earthquake insurance demand in high-risk regions and suggests a model that can be adjusted for comparable analyses in other emerging markets.

LIVESTOCK FARMERS RISK PERCEPTION AND WILLINGNESS TO PAY FOR LIVESTOCK INSURANCE IN FLOOD-PRONE AREAS OF PUNJAB

Pakistan is the world’s most susceptible country to extreme climatic events, such as floods. As such, for many years, the country has faced the risk of losses from natural calamities without crop insurance. However, in recent years, the national government has undertaken crop insurance initiatives in Pakistan. Consequently, there is limited knowledge available on the adoption of crop insurance in Pakistan. To fill this gap, this study aims to examine the factors influencing the willingness to pay for livestock insurance in flood prone areas of Punjab. Primary data were collected from 204 farm households through a structured interview in flood-prone areas of Punjab. Data was analyzed with descriptive statistics and logistics models. The explanatory analysis was used to further look at the socio-economic characteristics of livestock farmers through MS Excel and binary logistics models to test the willingness to pay livestock farmers for insurance. The results show a positive relationship between the perceived risk of Farmers and the willingness to pay for insurance programs. The findings of this study show that the probability of farmers' WTP is increased due to a better understanding of financial institutions and having more technical knowledge. The study results show that farmers with adult males are more likely to pay livestock insurance.

The Impact of Herders’ Risk Attitudes on Livestock Insurance: Evidence from the Pastoral Areas of Tibetan Plateau

In the context of advancing the transformation and upgrading of grassland animal husbandry, encouraging and guiding the widespread adoption of livestock insurance plays an important role in promoting the sustainable development of the livestock industry. This paper explores the impact of herders’ attitudes and perceptions towards climate change risks on their livestock insurance strategies. Firstly, experimental economics methods are employed to measure the risk preferences of herders on the Tibetan Plateau. Secondly, a theoretical model incorporating risk preferences and insurance adoption behavior is constructed. Finally, the effects of herders’ risk preferences on insurance adoption behavior are empirically examined through double-hurdle models, instrumental variable models, and moderating effect models. The results reveal that (1) most herders on the Tibetan Plateau exhibit risk-averse characteristics. (2) The degree of risk preference has a significant negative impact on herders’ insurance adoption behavior, while the risk perception significantly positively influences insurance adoption. The results remain valid even after addressing issues of endogeneity and conducting robustness checks. (3) Livestock income plays a crucial moderating role in the mechanism through which risk attitudes affect insurance adoption behavior. (4) The impact of risk preference on insurance adoption behavior shows regional and income heterogeneity.

The Effect of Flood Exposure on Insurance Adoption Among US Households

AbstractDespite increasing exposure to flooding and associated financial damages, estimates suggest more than two‐thirds of flood‐exposed properties are currently uninsured. This low adoption rate could undermine the climate resilience of communities and weaken the financial solvency of the United States National Flood Insurance Program. We study whether repeated exposure to flood events, especially the disaster‐scale floods that are expected to become more frequent in a warming climate, could spur insurance adoption. Using improved estimates of residential insurance take‐up in locations where such insurance is voluntary, and exploiting variation in the frequency and severity of flood events over time, we quantify how flood events impact local insurance demand. We find that a flood disaster declaration in a given year increases the take‐up rate of insurance by 7% in the following year, but that the effect diminishes in subsequent years and is gone after 5 years. This effect is more short‐lived in counties in inland states that do not border the Gulf and Atlantic coasts. We also find that the effect of a flood on take‐up is substantially larger if there was also a flood in the previous year, and that recent disasters are more salient for homeowners whose primary residences are exposed to a disaster declaration compared to non‐primary residences. Overall, these findings suggest that relying on households to self‐adapt to increasing flood risks in a changing climate is insufficient for closing the insurance protection gap.

Hyper-Personalization in Motor Insurance: Understanding Telematics Insurance Adoption Using the Extended Technology Acceptance Model

Hyper-Personalization in Motor Insurance: Understanding Telematics Insurance Adoption Using the Extended Technology Acceptance Model

Comparative effects of self-evaluated and test-based financial literacy on choosing life insurance policies in a multi-racial context

This study investigates the relationship between financial literacy and the choice of life insurance policies in the multi-racial context of the United States. Both subjective and objective measures of financial literacy are considered important factors in shaping consumer behavior in the life insurance market. Methods: Logistic regression analyses were conducted using data from the 2022 Survey of Consumer Finance to explore how financial literacy is related to the ownership of different types of life insurance, including term insurance, cash value insurance, and a combination of both. The analysis controlled for demographic variables such as age, race, and marital status. Results: The results show that subjective financial literacy significantly influences the ownership of all types of life insurance, while objective financial literacy only affects ownership of term insurance. Demographic factors, such as belonging to Generation X, or being married, also have a positive impact on life insurance ownership. Higher levels of education and income are associated with a higher likelihood of owning life insurance, while unemployment has a negative impact. Conclusion: The findings highlight the central role of subjective financial literacy in motivating individuals to purchase life insurance. Confidence in one's financial knowledge appears to be more influential than actual knowledge when making insurance decisions. Therefore, financial education programs should aim to improve both financial knowledge and confidence to encourage wider adoption of life insurance, ensuring greater financial security for diverse populations.

Examining Drivers of Digital Insurance Adoption in the Face of Industry Disruption: Evidence from Thai Insurance Customers

Examining Drivers of Digital Insurance Adoption in the Face of Industry Disruption: Evidence from Thai Insurance Customers

Factors Affecting Cattle Insurance Purchase and its Effects on the Financial Situation of Dairy Farmers

The results of the study indicated that the age of the respondents, the type of animals reared, herd size, and membership in dairy cooperatives and districts significantly influenced the adoption of cattle insurance. The education of the respondent, herd size, the type of animal holding, and membership in dairy cooperatives significantly influenced the willingness to pay for cattle insurance. Willingness to pay was found to be less than the actual payment for the cattle insurance premium, and it was more in the case of crossbreds than other categories of animals. The type of animal and membership in dairy cooperatives had a positive and significant influence on the actual level of payment for cattle insurance. The landholding size, animal herd size, and non-farm occupation, along with dairying, had a positive influence, and the loss of animals had a negative impact on the net- income of the farmers. Finally, it can be concluded that cattle insurance is one of the best risk mitigation strategies to help farmers stabilize their income under risks and uncertain situations.

Modeling the Socio-Economic Factors Affecting Islamic Insurance Adoption: A Structural Equation Modeling Analysis

Modeling the Socio-Economic Factors Affecting Islamic Insurance Adoption: A Structural Equation Modeling Analysis

Factors influencing United States cattle producers use of livestock risk protection

AbstractUnited States cattle producers have various government‐sponsored programs to protect against weather and disease related risks, but livestock risk protection (LRP) insurance is the only program that protects against price risk. However, adoption of LRP insurance is low even though cattle price declines are the primary cause of economic loss, and LRP premium subsidies have recently been increased. Therefore, the objective of this study is to explore how informational nudges about receiving an indemnity payment, LRP contract characteristics, and individual risk preferences affect the use of LRP. Producer survey results were estimated using a Cragg model to determine the factors affecting producers’ likelihood of purchasing LRP and the number of head they would insure. Producers were more likely to purchase 100% LRP coverage and would also insure more head at 100% coverage when compared to lower coverage levels. We found providing information on the probability of receiving an indemnity did not impact LRP purchasing decisions. However, counter to expectations, producers were more likely to buy LRP when the randomly provided cattle prices in the survey were successively increasing each month, and if participants considered themselves more willing to take risks in their cattle operation. Results provide insights into behavioral factors affecting LRP participation which could help inform future insurance policies.