An investigation of micro-insurance demands and the current risk management behaviour of low-income households in Tanzania

This research dealt with An Investigation of Micro-Insurance Demands and The Current Risk Management Behaviour of Low-Income Households in Tanzania. The fact that low income persons live in risky environment, vulnerable to numerous perils including illness, accidental death and disability, loss of property to theft and/or fire, agricultural losses and disasters of both natural and man-made varieties (Churchill, 2006), and that they are the least able to cope when crisis occurs makes micro-insurance inevitable. Therefore, large numbers of Low-Income Households in Tanzania demand insurance. The insurance business in Tanzania encounters different challenges concerning the provision of insurance products and services to customers. Such challenges are hindering insurance from expanding their operations and becoming more profitable. The objectives of this research was to find out the major risks facing low income households, current risk management strategies, the reasons as to why micro-insurance is being given a low priority as a risk mitigating behavior. Among strategies used by low income house hold to mitigate risks include selling asserts (land, house, animals or any property) and other are using insurance agencies. Primary data for the research were collected from all three districts in Dar es Salaam and staff from NIC. The overall conclusion of the study is that insurance service and products are very important to people with low income. However the sector is faced by a number of challenges including financial power, limited user education, and lack of trust, corruption and bureaucracy.