The development of low-income insurance in the Maltese insurance industry : is it viable?

Abstract

Globally speaking, there are certain social groups that for a reason or another do not have the necessary financial protection that cover them in case of an unexpected loss. In Malta, the social groups that lack such cover include low-income workers. For the purpose of this Dissertation, local hawkers will be the category investigated. It is more vital for low-income workers to protect their assets since the risks they face are typically far more significant and have a major impact on their financial situation. Consequently, innovative and creative concepts as to how effectively challenge such lack of insurance protection within the low-income social group seem to be required. This research study focuses on identifying how a Hawker's insurance policy, which can be locally regarded as a new type of insurance, could be developed in Malta, enabling people with low and irregular income to be able to enjoy insurance protection. Basically, low-income insurance can be based on microinsurance concepts, whereby low income people are allowed to transfer their risk and purchase the security they need. In fact, microinsurance solutions are offered for most risks covered in the traditional markets and include health insurance, life insurance, accidental disability, accidental death along with agricultural and livestock with regards property insurance. This research study identifies and outlines the viability of implementing a low-income insurance policy into the Maltese insurance market. In fact the research reveals that Hawkers are indeed identifying Theft and Fire as their major risk concern and there is indeed scope for developing an insurance policy which seeks to protect these risks especially if the premium is manageable and affordable. Moreover, this study provides concrete suggestions to insurers for the development of such insurance protection.