Precondition on microinsurance in Ukraine: contingent valuation approach for poor population behaviour regarding insurance services (CASE STUDY)

Abstract

The work represents the risk-behavioural aspects of finance and insurance related to low-income people in Ukraine and answers the main question concerning microinsurance: can microinsurance provide value for low-income people? The definition of microinsurance is presented. The study uses the contingent valuation method, as it used a survey to directly ask low-income people how much they would be willing to pay for insurance. The polling was performed in 2011-2013 and covered about 3000 people. It is found that Urban poor were found to prefer to have an annual microinsurance premium of less than 3% of the Minimal Ukrainian Salary (MUS) and the desired size of annual microinsurance coverage was found to be not less than the 3MUS microinsurance tariff, at a rate 1% of the desired insurance sum.