Assessing the role of micro insurance in poverty reduction: Case study of Glico Insurance Company

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JULY, 2015.
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This study builds on logical and systematic understanding of micro insurance as a relevant element of the micro finance package. The study generally determines the role micro insurance play in reducing poverty. Specifically, the study aimed at examining various mechanisms for creating micro insurance awareness, types of micro insurance products on offer, benefits of micro insurance as well the challenges in providing micro insurance services. An in-depth analysis used both secondary and primary data gathered through documentary review, questionnaires and face-to-face interview. Data were analyzed and summarized using descriptive statistics aided by SPSS and MS-Excel. A total of eighty (80) respondents representing clients of Glico insurance company and one staff of the company were interviewed through questionnaires and face-to-face interviews respectively. The study revealed that micro insurance is beneficial in many ways to the clients who purchased Glico‟s micro insurance policy. The most to least benefits as revealed by the study were savings component benefit of the policy, reimbursement of damage item. However, some respondent (though insignificant) revealed that purchasing a micro insurance policy has not been beneficial in any way. Types of micro insurance product subscribed, per the study, showed that all clients but one (who purchased property policy) had purchased a life insurance policy in either Anidaso life policy or Edwa Nkosuo life policy. The study again revealed various mechanisms through which clients became aware of Glico‟s micro insurance products and these mechanisms include customer referral, advertisement, partner-agent model and family referral. Challenges faced by Glico in the provision of micro insurance services to low income earners pointed to rampant collapse of micro finance companies such as DKM and Noble Dream as well as intense competition from other providers like Star Assurance and State Insurance Company. The study, finally recommended that Glico and all insurance players in the micro insurance business should deliver services to more rural areas where low income earners abound in order to achieve greater impact of poverty reduction. Again, needs assessment of low income earners must be conducted periodically and appropriate micro insurance products designed to meet identified needs.
A thesis submitted to school of business, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirement for the award of the degree of Master of Business Administration.