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In January 2010 the MIA and Save the Children (SC) published a report on the viability of microinsurance in Nepal, analysing the data from a recent baseline study.

The study - Financial Inclusion Opportunities for Micro Health Insurance in Nepal, An Exploratory Analysis of Health Incidence, Costs and Willingness to Pay in Dhading and Banke Districts of Nepal - presents and analyses the data collected in the Banke and Dhading districts of Nepal in early 2009. The study concerns the launch of community-based micro health insurance units for the members of two grassroots microfinance NGO; Nirdhan and DEPROSC.

This report is based on information collected in two districts of Nepal (Banke and Dhading) in early 2009 which includes a survey of 2,008 households, 40 focus group discussions (with potential beneficiaries), in addition to 51 key informant interviews with healthcare providers.

With its 150 pages rich with tables and first-hand data, this is the first published study available on the viability of microinsurance that tackle holistically and in full detail the socioeconomic status of the target population, incidence of illness and health-seeking behavior, the cost of healthcare, and the willingness to pay for health insurance in Nepal.

The baseline data and the analysis contained in the report confirm the need for health insurance, and the feasibility of launching community based insurance. Levels of willingness to pay (WTP), while modest, make it possible to form several options of a benefits package, allowing prospective clients to choose according to their priorities. From the educational profile, computer literacy and prevalent access to microfinance, the report concludes that the target population in the Banke and Dhading districts of Nepal can understand the value proposition of insurance, and could assume responsibility for the operation of their microinsurance, once adequately trained.

This study is the result of efforts by several players: Save the Children Nepal provided project management and logistics in Nepal; Nirdhan (in Banke) and DEPROSC (in Dhading) facilitated fieldwork and data collection, and the Micro Insurance Academy took the technical lead on survey design, selection of technical partners, data collection, analysis and writing the report.

Funding for this study was obtained from a grant given by Rockefeller Foundation (New York) to Prof. David Dror, hon. professor at Erasmus University Rotterdam and Chair, MIA, as well as a donation from an anonymous donor to Save the Children.

The Report, the Executive Summary and a flyer on the study are freely available for download from MIA's Publications page at:

http://www.microinsuranceacademy.org/publications

Stay tuned for more updates in the coming editions of Micro Insurance Voices!