Determinants of Demand for Micro-insurance in Cameroon
Date
2020-11-15
Authors
Médard, Nana Djomo Jules
Rodrigue, Ngouana Koudjou Serges
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
This study aims at identifying the determinants of demand for micro-insurance
in Cameroon using a methodology based on the analytical framework proposed
by Heckman (1979). These are counting models with double selection. First, a biprobit selection model is estimated to determine membership of an association
on the one hand, and subscription to a micro-insurance on the other. Second,
interest models called counting models are estimated to identify and analyze the
factors that affect the number of micro-insurance policies. Data for the study are
from the Fourth Cameroon Household Survey (ECAM4), a survey with national
coverage conducted by the National Institute of Statistics (NIS) in 2014. The results make it possible to identify significant factors that are positively correlated
with membership of an association and subscription to a micro-insurance. These are
mainly factors such as level of education, age squared and household size. Conversely,
the results show that male gender and the age of the household head significantly and
negatively influence membership and subscription. Furthermore, male gender, age
squared, household size and insurance premium are positively related to the number
of micro-insurance policies purchased by household heads. Finally, age and level
of education are negatively correlated with the number of micro-insurance policies
purchased. Furthermore, the inverse of the Mills ratio indicates that the number of
micro-insurance policies is negatively correlated with unobserved characteristics.
In a context of poverty, these results call for several actions by public authorities to
promote micro-insurance as a way of achieving universal social security protection.