Designing index insurance to benefit women
Womens’ businesses started as part of BOMA’s poverty graduation program benefit women and their households. Unfortunately, when droughts strike the region, the entire economy is affected, and those businesses are often liquidated. Insurance is a possible solution to this problem, and we are conducting a randomized controlled trial in Samburu County, Kenya to test whether Index-Based Livestock Insurance increases resilience.
SimPastoralist from Andrew Hobbs on Vimeo.
However, livestock are viewed as a man’s asset in Samburu, so livestock insurance might not be optimally suited to women’s priorities and responsibilities. Would women receive more benefits from an insurance product framed around supporting household consumption in the event of a drought?
To answer that question, I designed a tablet based game called SimPastoralist (download here) to simulate pastoralist life. The game simulates pastoralist life with an emphasis on decisions around livestock rearing and insurance. In each round pastoralists decide how many goats and how much insurance to buy. If the rains are good, goats reproduce and insurance does not pay out, but if the rains are bad, goats die and insurance payouts offset their losses. Playing SimPastoralist helps participants understand insurance and also gives us data on how people make insurance decisions. Since we wanted to study whether framing insurance around women’s indirect risks and responsibilities would increase demand, we explained the insurance in the traditional “protect-your-livestock” way in half of the sessions and in the other half emphasized the fact that insurance payouts could be used not just to protect livestock but also to buy food for the household or pay school fees in the event of a drought. We played the game with 387 couples in 34 sessions. In half of those sessions we offered ‘livestock insurance’, and in half of sessions we emphasized that insurance could also be used for household consumption or school fees. As theory predicted, women bought more insurance under the more flexible framing, while men bought more under the traditional ‘livestock’ framing.
Our next step is to test this concept in the real world. We are currently seeking funding to work with Takaful Insurance, the company behind Index Based Livestock Insurance, to develop an insurance product focused on covering core household expenses during droughts. Pending that support, we will be able to test the ability of this new insurance product to better support women and their businesses.
We also developed a version of the game that makes it possible for two players (a couple in our experiments) to transfer funds to each other at any time. See the video below for an example of gameplay in the two-player version of SimPastoralist.