Pricing for Microinsurance: A Technical Guide

This toolkit seeks to provide readers with a greater understanding of the process and tools used to improve pricing of microinsurance products. In particular, the toolkit will benefit microinsurance practitioners, especially persons responsible for setting premium rates in their microinsurance institutions, and persons responsible for providing data and information to be used for pricing. It also acts as a useful reference for capacity building of consultants working on improving the pricing capacity of microinsurance providers and product development teams. The toolkit uses both theory and examples to illustrate the pricing process and also presents two case studies to reinforce pricing concepts. It seeks to help readers:

• Identify key context elements to be considered in pricing microinsurance;
• Describe the pricing process and premium components;
• Set and validate pricing assumptions based on relevant data;
• Set appropriate monitoring processes for more effective pricing reviews;
• Understand the calculations required for determining risk premiums, security and expense loadings as well as the final gross premiums.