Adoption Of Insurance Research Articles

Contextual centrality: going beyond network structure

Centrality is a fundamental network property that ranks nodes by their structural importance. However, the network structure alone may not predict successful diffusion in many applications, such as viral marketing and political campaigns. We propose contextual centrality, which integrates structural positions, the diffusion process, and, most importantly, relevant node characteristics. It nicely generalizes and relates to standard centrality measures. We test the effectiveness of contextual centrality in predicting the eventual outcomes in the adoption of microfinance and weather insurance. Our empirical analysis shows that the contextual centrality of first-informed individuals has higher predictive power than that of other standard centrality measures. Further simulations show that when the diffusion occurs locally, contextual centrality can identify nodes whose local neighborhoods contribute positively. When the diffusion occurs globally, contextual centrality signals whether diffusion may generate negative consequences. Contextual centrality captures more complicated dynamics on networks than traditional centrality measures and has significant implications for network-based interventions.

Analysis of the impact of cyber events for cyber insurance

The mass adoption of cyber insurance will be predicated on the ability to conduct quantitative cyber risk assessment. This capability is crucial for not only providing insight into the cost of targeted threats but also providing incentives for insured enterprises to invest in protection aimed at preventing exploitation of targeted threats. Research indicates that asymmetric information, correlated loss and interdependent security issues make this difficult if insurers cannot monitor the cybersecurity efforts of the insured enterprises. In this paper, we present an analysis of cyber impacts based on cyber incidents reported in the Advisen cyber loss data feed. We show: (i) how exposure to cyber incidents varies between corporate sectors; (ii) how the type of incident relates to the number of entities and individuals affected by it; (iii) how the type of incident relates to the eventual financial cost; (iv) what type of information is most frequently compromised; (v) a breakdown of the main actors behind cyber incidents; and (vi) how tree-based classifiers can be used to gain insight into cyber risk indicators affecting the cost of incidents.

Subsidy Policies and Insurance Demand

Using data from a two-year pricing experiment, we study the impact of subsidy policies on weather insurance take-up. Results show that subsidies increase future insurance take-up through their influence on payout experiences. Exploring mechanisms of the payout effect, we find that for households that randomly benefited from financial education, receiving a payout provides a one-time learning experience that improves take-up permanently. In contrast, households with poor insurance knowledge continuously update take-up decisions based on recent experiences with disasters and payouts. Combining subsidy policies with financial education can thus be effective in promoting long-run insurance adoption. (JEL G22, G52, G53, Q54)

Trends and best practices in health care cybersecurity insurance policy

Health care organizations are a major target for cyberattacks. This is primarily due to their peculiar vulnerabilities and attractiveness to nefarious cyber actors. Data breaches from these attacks present a significant threat to the viability of health care organizations, ranging from financial losses to compromised patient safety. Cybersecurity insurance has become an essential tool for mitigating financial liabilities that may arise from breaches for many organizations. This paper reviews the current state of cybersecurity insurance adoption in the health care sector. It highlights best practices in cybersecurity insurance policy for health care organizations and recommends future directions to strengthen cybersecurity and improve cybersecurity insurance.

Effect of Village Savings and Loan Associations on adoption of index-based crop insurance under limited liabilities

A household survey and focus group discussions were conducted to quantify the general determinants of an index-based crop insurance adoption under limited liabilities in Burundi, and specifically the effect of existing Village Savings and Loan Associations (VSLAs). The survey sample comprised of 40 crop insurance adopters, 40 non-adopters and 40 drop-outs in Bukirasazi and Makebuko communes of Gitega province. The results indicated that saving money (by VSLAs) for upcoming premium payments and regularly VSLA meetings attendance increase insurance adoption with relative risk ratio (RRR)=0.21, p≤0.001) and (RRR=0.01, p≤0.01), respectively. In addition, VSLAs’ members with more knowledge in land management (RRR=0.07, p≤0.05), crop management (RRR=0.05, p≤0.001) and integrated farm planning (RRR=0.03, p<0.05) were more likely to adopt the crop insurance. Furthermore, smallholders being aware and less appreciative limited liability were more likely inclined to adopt crop insurance with RRR=0.12 (p≤0.01) and RRR=0.01 (p≤0.001), respectively. Given the importance of VSLA in fostering crop insurance adoption, we recommend strengthening VSLAs in their operation, save for upcoming premium payments as jointly agreed and set in their constitution, and encourage smallholders to run their farms with integrated farm planning. Due to limited knowledge of smallholders about the mode of crop insurance operation, a more extensive capacity building coupled to a coaching by experts in this domain is more than a necessity.

Determinants of agricultural insurance adoption: evidence from farmers in the state of São Paulo, Brazil

Purpose The purpose of this study is to investigate the determinants of agricultural insurance adoption by farmers of the state of São Paulo, Brazil. Design/methodology/approach Primary data from the 2015/2016 crop season was collected from a sample of 175 farmers. Logit econometric models were applied to identify the variables that affect the probability of agricultural insurance adoption. Findings The empirical results show that the education level, access to technical assistance, use of management tools and farm size positively affect the probability of adopting agricultural insurance. In addition, farmers who produce soybean and/or corn are more likely to use insurance. On the other hand, the higher the farmers’ propensity to take risk the lower the likelihood of using insurance. Research limitations/implications The empirical analysis is based on cross-sectional data of a sample of 175 farmers of the state of São Paulo. The use of panel data with a larger sample of farmers, considering a period of years, could provide additional information. Originality/value To the best of the knowledge, this is the first empirical analysis about determinants of agricultural insurance adoption by Brazilian farmers, considering behavioral factors. The findings provide useful insights for policymakers in formulating risk management programs in the Brazilian agricultural markets. A better understanding about the determinants of insurance adoption is also relevant for private companies that sell insurance to farmers. Therefore, the paper may contribute with the diffusion of rural insurance as risk management tool in Brazilian agriculture.

Determinants of Adoption of Crop Insurance: Evidence from Bolangir District in Odisha

Pradhan Mantri Fasal Bima Yojana (PMFBY) is an area-based crop yield insurance scheme introduced in Odisha in Eastern India since kharif, 2016. The present study aims to identify the factors that determine the adoption of PMFBY among farmers and examine the operational efficiency of the scheme. The study is based on a field survey conducted in the drought-prone Bolangir district in Western Odisha. A total of 200 households were interviewed with questionnaires, which included 80 loanee and 80 non-loanee PMFBY users and 40 non-users. Probit regression is fitted to identify the factors that determine the adoption of PMFBY. Higher caste farmers with greater farm size, larger household incomes and indebtedness and risk-averse farmers are more likely to adopt PMFBY. Farmers having more dependence on non-farm income are less inclined to buy crop insurance. Farmers cite various reasons for dissatisfaction with the scheme such as: delay in compensation payment, large loss assessment unit and non-coverage of individual and independent risks.

Factors affecting beef cattle farmers adopt Cattle Business Insurance

This study aimed to determine the factors that influence small holder beef cattle farmer to adopt business insurance for cattle businesses. This research was conducted from February to March 2019, Bungaya sub-district, Gowa regency. The type of research was explanatory. The population in this study was all small holder beef cattle farmer in Bungaya district as many as 4,324 farmers. Samples were 98 farmers who adopted and did not adopt the cattle business insurance program. The data analysis used was logistic regression. The results showed that the factors affecting adoption of beef cattle business insurance, i.e. the number of family members, farmer attitudes, farmer subjective norms, assurance certainty, and dependence on cattle farming has an influence and is significant on the adoption of the cattle business insurance program.

Developing sustainable arrangements for “proactive” disaster risk financing in Java, Indonesia

Purpose Recent years saw a paradigm shift from ex post (reactive) to ex ante (proactive) approaches (e.g. insurance) to disaster risk financing for building resilience of communities in developing countries. To facilitate adoption, the approaches should be adapted so that they can be technically feasible and culturally desirable to the local context. This paper aims to report an exploratory study to elaborate the existing arrangements to deal with the impacts of disaster and the potential to shift to a more proactive disaster risk financing in Indonesia. Design/methodology/approach A series of stakeholder engagement activities in Semarang and Solo, Indonesia was conducted to ascertain the existing arrangements for disaster risk financing at local government level, the challenges/barriers to the adoption of insurance, education and policies to facilitate the transformation from reactive to proactive process. Thematic analysis was applied to transcribed conversations during interviews, focus groups and workshops. Identification of emerging issues/themes was also guided by the researchers’ notes during the events, and facilitated by qualitative analysis software, Atlas Ti®. This was complemented by an analysis of regulations and documents provided by the local stakeholders. Findings The local governments heavily rely on contingency fund, which is not enough and often significantly delayed to fund recovery and reconstruction of public infrastructure. The use of insurance is limited in both public and private sectors, particularly in the majority of low-income communities. Various barriers and challenges were identified under several categories, namely, institutional, cultural, affordability, lack of awareness and knowledge, insurance arrangement process and lack of trust. The findings also suggest that improving insurance education should involve multiple stakeholders, and both formal and informal routes should be pursued. Originality/value The research fills the gap of knowledge in disaster risk financing in the context of developing countries, specifically in local governments and communities in Indonesia. The findings may be replicable for other developing countries with low adoption of ex ante financial instruments for dealing with the impacts of disaster.

Delayed Premium Payment, Insurance Adoption, and Household Investment in Rural China

We conduct a randomized controlled trial to examine the impacts of delayed premium payment on insurance uptake and the subsequent investment decisions among smallholder farmers in rural China. Our results show uptake among those with the delayed payment option is 10% higher than and three times as high as among those without the option. We also find a positive impact of delayed premium payment and insurance adoption on household investment in production, especially higher risk activities.

Oil prices and bank credit risk in MENA countries after the 2008 financial crisis

PurposeThe purpose of this paper is to investigate the oil price–bank risk nexus by considering the heterogeneity of bank characters.Design/methodology/approachThis paper empirically tests the effect of oil price movements on bank credit risk by using a sample of 279 banks in the Middle East and North Africa countries from 2011 to 2017.FindingsAuthors find robust evidence that the credit risk of bank loan portfolios is negatively associated with increased oil prices. The heterogeneity analysis indicates that the effect of asset quality improvement brought about by rising oil prices is more salient in conventional banks, and banks with small size, low liquidity and whose funding source relies on customers’ deposits.Practical implicationsThe results favor the diversification of bank funding sources, the improvement of a country’s financial development, the adoption of explicit deposit insurance and macroprudential policies, such as countercyclical liquidity buffers, to weaken the adverse impact of oil prices declines.Originality/valueThe present paper enriches the literature of oil price–bank risk nexus by analyzing the heterogeneity of bank characters and advances our knowledge on the determined factors of bank riskiness and vulnerability.

Long‐Term Care Insurance Adoption in East Asia: Politics, Ideas, and Institutions

Adopción de seguros de cuidados a largo plazo en Asia oriental: política, ideas, e institucionesDesde la década de 1990, Japón, Corea del Sur y Taiwán han adoptado sistemas de seguro social LTC (LTCI) para enfrentar la creciente “crisis de envejecimiento” en sus países. La investigación comparativa sugiere la difusión del modelo japonés entre los estados del este asiático. Combinando el aprendizaje de políticas, el establecimiento de la agenda y los enfoques institucionalistas históricos, este estudio examina comparativamente cómo los procesos ideológicos e institucionales han impactado la competencia política y, en última instancia, la adopción de LTCI en Japón, Corea del Sur y Taiwán. Sostengo que el diseño LTCI de cada país difiere mucho entre sí, mostrando formas distintivas de bricolaje institucional, no isomorfismo institucional. En este proceso, el tiempo ha sido un factor crucial. El tiempo afecta los procesos ideológicos, institucionales y políticos de manera diferente. El peso relativo de los procesos ideológicos e institucionales en un momento particular en el tiempo y su evolución a lo largo del tiempo tiene un impacto significativo sobre si se produce un cambio de política y si este cambio puede socavar gradualmente la lógica de los regímenes de bienestar.

Analysing the Links Between Index-Based Crop Insurance Adoption and Agricultural Investments in Burundi

This paper analyses the links between index-based crop insurance (IBI) adoption and agricultural investments based on a cross-sectional sample of 40 crop insurance adopters and 40 non-adopters from two communes located in Gitega province in Burundi. Analysed agricultural investments variables included use of fertilizers, applying crop diversification, and use of land and crop management practices in the most recent year and in the year before IBI implementation started. The results from multivariate analysis indicate that adopters use 36% more chemical fertilizers and invest 18% more in chemical fertilizers than non-adopters (p≤0.01). Adopters apply more land management practices also, in which they invest 15% more than non-adopters (p≤0.01). Furthermore, adopters change crop management practices over time by 38% and their knowledge in crop management practices increased by 23% (p≤0.01). Differences between adopters and non-adopters are however not statistically significant for crop diversification strategies and for the use of organic fertilizers. Hence, in order to be more effective and beneficial to farmers, other actions are also needed to encourage farmers to invest in their farm. Particularly promising in Burundi in this respect is to empower and train farmers by means of the Integrated Farm Planning approach, as well as to enhance farm inputs availability and to promote smart agri-entrepreneurial programs. In order to enhance agricultural development, the Burundi government should have a more prominent role in fostering farmers’ agricultural investments and in supporting IBI adoption.

Total war and the emergence of unemployment insurance in western countries

ABSTRACT Beginning with Richard Titmuss, several scholars argued that modern warfare left a major imprint on welfare state development. This article analyses the impact of both world wars on the introduction of unemployment insurance. From the outset, the provision of income support to the unemployed was politically controversial. This paper argues that total war, for various reasons, was a catalyst for the adoption of unemployment insurance. Using regression analysis and relying on a sample of 18 western countries, we show that a nation’s high exposure to the horrors of war facilitated the breakthrough of unemployment insurance, notably immediately after the end of military conflict.

Loss aversion and the demand for index insurance

Abstract This work analyzes if reference dependence and loss aversion can explain the puzzling low adoption rates of rainfall index insurance. We present a model that predicts the impact of loss aversion on index insurance demand to vary with different levels of insurance understanding. Index insurance demand of farmers who are unaware of the loss-hedging benefit that insurance provides decreases with loss aversion. In contrast, insurance demand of farmers who are aware of the loss-hedging benefit increases with loss aversion. The model further predicts that farmers who are unaware of the loss-hedging benefit will not demand an even highly subsidized index insurance. Using data from a randomized controlled trial involving a sample of Indian farmers we provide empirical support for our core conjecture that insurance understanding mitigates the negative impact of loss aversion on index insurance adoption.

LONG-TERM CARE IV A REVIEW OF THE LONG-TERM CARE INSURANCE PROGRAMS IN 15 PILOT CITIES IN CHINA

China is now making all the efforts to solve the problem of who pays the bill for the rapidly increasing long-term care services. Since 2016, 15 cities in China have begun their pilot programs in long-term care insurance. Each city designed its own program. Some cities finance their long-term care services from medical insurance funding solely. Others supplement it with individual and/or employer contributions. This study documents the nature and extent of implementation of long-term care insurance across the 15 pilot cities to draw lessons for subsequent implementation nationally. This study used qualitative methods, including document review and key informant interviews with long-term care insurance administrators, medical insurance administrators, service providers in different settings and families and individuals who use long-term care services. Results reveal considerable variation in the specific attributes of the long-term care insurance programs implemented across the 15 participating cities, with respect to such characteristics as the target population, policy coverage, and payment methods, etc. Results also shed light on the achievements and challenges in implementing the long-term care insurance program. This study’s examination of long-term care insurance adoption in 15 Chinese cities serves as an important base with which to inform future national long-term care insurance design and implementation. It suggests that successful adoption of long-term care insurance across China will require administering jurisdictions to anticipate and address policy bottlenecks and implementation barriers that might otherwise inhibit program impact and effectiveness in addressing the growing long-term care needs of China’s aging population.

The Impact of Risk Perception on Flood Insurance Adoption Intention in the Coastal Areas of South Korea

The Impact of Risk Perception on Flood Insurance Adoption Intention in the Coastal Areas of South Korea

Influential factors of Islamic insurance adoption: an extension of theory of planned behavior

PurposeThe role of insurance is a backbone for consumers to secure their future. It is important to know where to invest and what are the benefits. Therefore, for the Muslim segment, Islamic insurance system provides Riba (interest)-free environment where consumers invest their money and recover their losses according to sharia. This paper aims to examine the determinants that influence purchase intention of consumers toward Islamic insurance (Takaful) adoption in Pakistan with the help of the modified theory of planned behavior (TPB).Design/methodology/approachThe authors added four specific variables related to Islamic sharia compliance in the conventional form of the TPB. The relationship among the variables is assessed by using partial least squares structural equation modeling, while the data are collected from 305 respondents.FindingsThe results suggest that attitude, subjective norm and perceived behavioral control are strong predictors of an Islamic insurance adoption in Pakistan. Moreover, factors such as compatibility, relative advantage and awareness have positive and significant impacts on takaful participation. A negative but insignificant relation is found between perceived risk and intention.Practical implicationsThis paper provides insight for understanding the factors that lead to consumers' purchase intention of Islamic insurance.Originality/valueThis paper makes a unique contribution to the literature with reference to Pakistan, being a pioneering attempt to investigate the factors of Islamic insurance adoption by modifying the TPB and applying more rigorous statistical techniques like confirmatory factor analysis (CFA) and partial least square structural equation modeling.

Emerging research practice for impact in the CGIAR: The case of Index-Based Livestock Insurance (IBLI)

Under increased scrutiny by its funders, the CGIAR continues to search for ways of translating research excellence into innovation and developmental impact. Several approaches have been suggested that recognize the interactive nature of innovation. While these have been deemed useful, it is the deeper institutional change agenda that has been a bottleneck in the evolving ways of the CGIAR deploying science for impact. This article documents an example in the CGIAR where significant innovation appears to have taken place in research practice, and where the institutional setting of both the CGIAR center involved and its donors have adapted to accommodate this new approach. The case study presented is recent experiences at the International Livestock Research Institute (ILRI) of developing and facilitating the adoption of Index-Based Livestock Insurance (IBLI) in Kenya and Ethiopia. The approach of the IBLI program evolved as a form of research practice that expands the boundaries of legitimate research practices in the CGIAR: it maintained the essentials of international public goods, but also included activities engaging with innovation processes that led to tangible household impacts. While the development and use of this approach was not without its tensions both within ILRI and with donors funding the work, the approach proved highly successful and won acceptance and legitimacy. This suggests that organizations should encourage and support individual projects and teams to adapt, develop, and adopt different approaches in order to achieve impact. Accepting pluralistic narrative of success will be a critical part of this.

Liquidity constraints, informal institutions, and the adoption of weather insurance: A randomized controlled Trial in Ethiopia

We report the results of a drought insurance experiment in Ethiopia, and examine whether uptake of index-based insurance is enhanced if we allow farmers to pay after harvest (addressing a liquidity constraint). We also test to what extent uptake can be enhanced by promoting insurance via informal risk-sharing institutions (Iddirs), to reduce trust and information problems. The delayed payment insurance product increases uptake substantially when compared to standard insurance, from 8% to 24%, and leveraging informal institutions results in even greater uptake (43%). We also find suggestive evidence that the delayed premium product is indeed better at targeting the liquidity constrained. However, default rates associated with delayed payments are relatively high and concentrated in a small number of Iddirs – potentially compromising the economic viability of the novel product. We discuss how default rates can be reduced.