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Development and Sustainability in Emerging Health Insurance Markets: Evidence from Microinsurance in Pakistan

Development and Sustainability in Emerging Health Insurance Markets: Evidence from Microinsurance in Pakistan. Agenda. Research question AKAM micro health insurance program Models and results Conclusion. Research question .

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Development and Sustainability in Emerging Health Insurance Markets: Evidence from Microinsurance in Pakistan

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  1. Development and Sustainability in Emerging Health Insurance Markets: Evidence from Microinsurance in Pakistan

  2. Agenda • Research question • AKAM micro health insurance program • Models and results • Conclusion

  3. Research question • Using data from a micro health insurance program in Pakistan, I identify how claim rates evolve as households renew their policies. • Do claim trends suggest increasing or decreasing sustainability?

  4. Sustainability: Facts and Literature Facts: High loss ratios, low renewal rates Literature: • Sustainable: Pauly, Blavin and Meghan (2008) • Not sustainable: Biener and Eling (2010)

  5. AKAM micro health insurance program • Northern Area of Pakistan (1st time) • Premium: 400 PKR ($5 USD) per person • Coverage: • Inpatient service (25,000 PKR) • Life insurance for head of HH (25,000 PKR) • One outpatient voucher (50 PKR) • Healthcare provider

  6. Data • 16,026 Households from 4 enrolment periods • Overall loss ratio: 1.97

  7. Comparison between new and renewed household

  8. Cross-period loss ratio comparison Nov cohort

  9. Models Model 1 Probability of renewing Renewal Claim Model 2 Two-part model Model 3 Total claim Total Amount Frequency Severity

  10. What predict renewal? Question: • Are households who filed claims during the current period more likely to renew? Dependent variable: Renewal decision in the next period

  11. What predict renewal? Result: • Filing claim (+0.13) • 1,000 PKR claim (+0.01) Other significant variables: • (+):Previously renewed, family size, child and elderly percentage

  12. Does renewal affect claim patterns? Model 2: two-part model Dependent variables: frequency and severity Model 3: total claim Dependent variable: total claim

  13. Does renewal affect claim patterns? Result: • Frequency: 1strenewal (-0.05) 2nd renewal (-0.05) • Severity: 1strenewal (-0.07) 2nd renewal (-0.01) • Total claim: 1strenewal (-0.32) 2nd renewal (-0.36)

  14. Conclusion and implication • Renewed business showed improved loss ratio. • It suggests that the high loss ratio is a start up cost.

  15. Thank You!

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