Reinsuring the poor: group microinsurance Design and costly state verification

Abstract

How is microinsurance, that is insurance for low-income people, economically different to conventional insurance sold to individuals in developed countries? The key assumption modeled in this paper is that many low income people are part of extended families or communities that share strong economic and social links, and that the cost of verifying a loss and making a transfer, known to insurers as loss adjustment, is much lower for individuals within such groups than for formal sector insurers.
Citation

Clarke, D.J. "Reinsuring the poor: group microinsurance Design and costly state verification", Ferdi Policy brief B42, September 2011