Identifying Factors of Micro-insurance Expansion in Developing Countries

People with low incomes are often exposed to a significant number of risks that adversely affect their current and future well-being; therefore, they need effective ways to manage and minimize these risks. Micro-insurance can be such a tool; however, the lack of understanding of this concept leads to low demand for microinsurance products. The purpose of this work is to determine the factors affecting the prevalence of micro-insurance. In other words, the share of the population using micro-insurance products in the developing countries of three regions: Africa, Asia and Oceania, Latin America and the Caribbean; the factors will be used for creation and development of the micro-insurance market in Russia. The first chapter of the work addresses key theoretical aspects of micro-insurance, including differences from traditional insurance, the main types and business models. In the second chapter, a review of developed micro-insurance markets in India, South Africa and Brazil was conducted, followed by identification of general trends in micro-insurance, effective distribution channels, and the most popular types. In the third chapter of the work, a regression model was built, which resulted in the most influential factors for microinsurance: the state support, the financial literacy, the inequality, the GDP per capita, the number of mobile phone users, and the accessibility to the Internet. As a result, empirically substantiated recommendations on the introduction of the micro-insurance market in Russia were proposed, the most important of which are the development of relevant legislation and the popularization of financial knowledge. These recommendations may be useful for insurance organizations and state authorities for the development of the micro-insurance system in the Russian Federation.