Pricing health microinsurance using basic actuarial techniques: the Kenyan case
This paper was an attempt to develop a pricing model for health micro insurance in Kenya, in particular Private Medical Insurance (PMI) and Health Cash Plans. It utilized national health statistics from the Kenya National Bureau of Statistics and the World Health Organisation to estimate incidence rates for the various benefits that would be offered under a health micro insurance scheme, as well as the costs of providing these benefits. These two variables were then used as inputs to a formula approach based pricing model that yielded the standard risk premium as its output. The incidence rates experienced by people in the age bracket 15-50 were the lowest. The risk premium was found to be highly sensitive to whether incidence rates were assumed to develop exponentially or linearly over time, especially with respect to the frequency of hospital admissions.