Is It All About Money? A Randomized Evaluation of the Impact of Insurance Literacy and Marketing Treatments on the Demand for Health Microinsurance in Senegal

This paper evaluates the effect of a customized insurance literacy module communicating the benefits from personal health insurance and mutual health organizations (MHOs). The module was administered on a randomly selected sample of households in the city of Thiès in Senegal, where MHOs have been present for years and are facing low take-up rates despite their benefits. The study also evaluates the effect of three cross-cutting marketing treatments using a randomized control trial. Findings indicate that:

• Insurance literacy module has no impact but marketing treatment has a significant effect on household take-up decisions;
• Educating the population about potential benefits of health microinsurance is unlikely to produce any significant outcome;
• Compensations in the form of reduced fees relating to membership were crucial in increasing take-up;
• State or city authorities could increase take-up rates by alleviating financial barriers to entry.

The paper highlights the importance of MHOs in reaching underprivileged households at relatively low cost. It also suggests that projects favoring the establishment of new insurance services or expanding existing ones should require payments of low entry fees if they are to be accessible to the poor.