Benefits and costs of risk insurance in selected countries of Asia

APN Science Bulletin所収
Volume (Issue): 8(1). doi:10.30852/sb.2018.265
Risk insurance

Several risk insurance initiatives have been implemented at the grassroots level for reducing the vulnerability of communities to natural disasters. Despite these efforts, the penetration of risk insurance in developing Asia is poor compared to many developed countries due to several barriers that this sector is facing and the cost of insurance premiums is an important one. Against this background, this study aimed to assess the benefits and costs accrued through community-level risk insurance experiences in the Asia region, evaluate barriers limiting its penetration, and identify interventions for greater risk insurance penetration leading to climate change adaptation and disaster risk reduction. The benefit-cost analysis presented in this paper was based on household surveys conducted in three countries including India, Malaysia and the Philippines. The study has indicated several benefits accrued from risk insurance in the case study countries and a positive benefit-cost ratio. The net positive benefit-cost ratios provide an impetus to promote risk insurance by governments and an important evidence for potential subscribers to consider investing in insurance. Subsidized premiums played an important role in the positive benefit-cost ratios, which helped them in enrolling and in continuing in the insurance schemes. Short-term risk reduction benefits were seen including the avoidance of distress sale of assets and continuation of normal life aftermath of the disasters. However, the impact of risk insurance on long-term risk reduction and in terms of related investments by the insured could not be well supported by our findings.

Joy J.
Arpah A.
Divya S.
Juan J.
J. Cummins