Reducing Vulnerability: The Supply of Health Microinsurance in East Africa

This paper addresses the supply side of microinsurance in East Africa. It is based on a study of the seven institutions:

• Uganda: Microcare, CIDR, Kitovu Patients Prepayment Scheme;
• Kenya: MediPlus, Community Health Plan;
• Tanzania: Poverty Africa and the Community Health Fund.

Some of the observations in these institutions were:

• All are financially weak except the Tanzanian government program;
• Pricing insurance products is very difficult for all;
• Some are implementing health promotion;
• Some have good risk management policies and procedures;
• Financial sustainability of all is uncertain;
• Some low-income people get access to better health care at an affordable price.

Some of the lessons from the experience of the institutions studied are:

• Adequate management capacity should be available to make micro insurance programs successful;
• Emergency loans, with disbursements made directly to the health care facility, can be appropriate and sometimes preferred over insurance;
• Underwriting should be simple and efficient for the low-income market;
• Marketing requires a strong component of market training;
• The partner that carries the risk should be well capitalized and willing and able to lose some money while the product is growing;
• Formal agreements with partners should be constructed so that everyone is clear about their role;
• External health information outreach programs should be coordinated with micro insurance.