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Development and Sustainability in Emerging Health Insurance Markets: Evidence from Microinsurance in Pakistan. Agenda. Research question AKAM micro health insurance program Models and results Conclusion. Research question .

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Development and Sustainability in Emerging Health Insurance Markets: Evidence from Microinsurance in Pakistan


Agenda
Agenda Markets: Evidence from Microinsurance in Pakistan

  • Research question

  • AKAM micro health insurance program

  • Models and results

  • Conclusion


Research question
Research question Markets: Evidence from Microinsurance in Pakistan

  • Using data from a micro health insurance program in Pakistan, I identify how claim rates evolve as households renew their policies.

  • Do claim trends suggest increasing or decreasing sustainability?


Sustainability facts and literature
Sustainability: Markets: Evidence from Microinsurance in PakistanFacts and Literature

Facts: High loss ratios, low renewal rates

Literature:

  • Sustainable: Pauly, Blavin and Meghan (2008)

  • Not sustainable: Biener and Eling (2010)


Akam micro health insurance program
AKAM micro health insurance program Markets: Evidence from Microinsurance in Pakistan

  • Northern Area of Pakistan (1st time)

  • Premium: 400 PKR ($5 USD) per person

  • Coverage:

  • Inpatient service (25,000 PKR)

  • Life insurance for head of HH (25,000 PKR)

  • One outpatient voucher (50 PKR)

  • Healthcare provider


Data Markets: Evidence from Microinsurance in Pakistan

  • 16,026 Households from 4 enrolment periods

  • Overall loss ratio: 1.97


Comparison between new and renewed household
Comparison between new and renewed household Markets: Evidence from Microinsurance in Pakistan


Cross period loss ratio comparison nov cohort
Cross-period loss ratio comparison Markets: Evidence from Microinsurance in PakistanNov cohort


Models
Models Markets: Evidence from Microinsurance in Pakistan

Model 1

Probability of renewing

Renewal

Claim

Model 2

Two-part model

Model 3

Total claim

Total Amount

Frequency

Severity


What predict renewal
What predict renewal? Markets: Evidence from Microinsurance in Pakistan

Question:

  • Are households who filed claims during the current period more likely to renew?

    Dependent variable:

    Renewal decision in the next period


What predict renewal1
What predict renewal? Markets: Evidence from Microinsurance in Pakistan

Result:

  • Filing claim (+0.13)

  • 1,000 PKR claim (+0.01)

    Other significant variables:

  • (+):Previously renewed, family size, child and elderly percentage


Does renewal affect claim patterns
Does renewal affect claim patterns? Markets: Evidence from Microinsurance in Pakistan

Model 2: two-part model

Dependent variables: frequency and severity

Model 3: total claim

Dependent variable: total claim


Does renewal affect claim patterns1
Does renewal affect claim patterns? Markets: Evidence from Microinsurance in Pakistan

Result:

  • Frequency: 1strenewal (-0.05) 2nd renewal (-0.05)

  • Severity: 1strenewal (-0.07) 2nd renewal (-0.01)

  • Total claim: 1strenewal (-0.32) 2nd renewal (-0.36)


Conclusion and implication
Conclusion and implication Markets: Evidence from Microinsurance in Pakistan

  • Renewed business showed improved loss ratio.

  • It suggests that the high loss ratio is a start up cost.


Thank you
Thank You! Markets: Evidence from Microinsurance in Pakistan


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