Regulation in Microinsurance Markets: Principles, Practice, and Directions for Future Development

41 Pages Posted: 9 Jun 2013 Last revised: 19 Jan 2016

See all articles by Christian Biener

Christian Biener

Institute of Insurance Economics, University of St. Gallen; University of St. Gallen - School of Finance

Martin Eling

University of St. Gallen - Institute of Insurance Economics; University of Saint Gallen - School of Finance (SoF)

Joan T. Schmit

University of Wisconsin - Madison - Department of Actuarial Science, Risk Management and Insurance

Date Written: June 7, 2013

Abstract

Regulation of any market can either promote or impede its development, thus affecting social welfare. In this paper, we are concerned with the impact of regulation in microinsurance markets. We evaluate existing and potential regulatory mechanisms with regard to its underlying economic rationale, and offer recommendations intended to enhance support and minimize barriers for microinsurance market development. Specifically, we recommend avoiding incentives for regulatory arbitrage; responding to the characteristics of the microinsurance market, including licensing, capital, reinsurance, and distribution systems; enhancing the market through financial literacy initiatives; and providing support in the form of data collection and management training.

Keywords: Developing countries, microinsurance, regulation

Suggested Citation

Biener, Christian and Eling, Martin and Schmit, Joan T., Regulation in Microinsurance Markets: Principles, Practice, and Directions for Future Development (June 7, 2013). World Development, Vol. 58, No. 1, 2014; University of St. Gallen, Institute of Insurance Economics Working Paper on Risk Management and Insurance No. 127. Available at SSRN: https://ssrn.com/abstract=2275996 or http://dx.doi.org/10.2139/ssrn.2275996

Christian Biener (Contact Author)

Institute of Insurance Economics, University of St. Gallen ( email )

Girtannerstrasse 6
St. Gallen, St. Gallen 9010
Switzerland

HOME PAGE: http://sites.google.com/site/bienerresearchprofile/

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

Martin Eling

University of St. Gallen - Institute of Insurance Economics ( email )

Kirchlistrasse 2
St. Gallen, 9010
Switzerland

University of Saint Gallen - School of Finance (SoF) ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

Joan T. Schmit

University of Wisconsin - Madison - Department of Actuarial Science, Risk Management and Insurance ( email )

Madison, WI
United States
608-262-4240 (Phone)

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