In a nutshell

Location Kenya
Sustainable Development Goal Good Health and Well-being

Project timeline 

"Project is 98.063973064% completed "

The Challenge

In 2016, approximately 6.8 million people in Kenya (14% of the population) were active members of the National Hospital Insurance Fund (NHIF), the country’s main health insurer. At around USD 18 per year, even NHIF’s most affordable individual coverage plan is prohibitively expensive for many. For someone earning USD 1 per day, for example, it costs 5% of annual income.

For the 80% of Kenyans who lack formal health insurance, health shocks are a looming concern. To reduce costs, the uninsured may be forced to avoid even necessary hospital visits or to accept health services of substandard quality – both of which are likely to adversely impact their health status. Low-income households must rely on risky strategies to finance health expenses, such as selling productive livestock or reducing food consumption, which in turn threatens to undermine their future productivity.

The Approach

The fintech company DDFinance aims to integrate currently uninsured Kenyan low-income households into the formal insurance system by offering at an affordable price an insurance product that both covers hospital stays and offers a payout in case of death. The lowest annual premium for this combined life and hospital insurance policy is USD 1.29, or 0.35% of the annual income of someone earning USD 1 per day. The highest premium is USD 12.26. DDFinance’s main innovation is that it offers collective-based insurance, meaning that its product is sold not to individual households but to established women’s savings and credit groups, which in turn play a role in the distribution and verification of claims.

To help realise the Kenyan government’s recently adopted goal of universal health coverage, it’s crucial to understand how formal health insurance in general, and DDFinance insurance in particular, affects low-income households’ well-being. Led by researchers at the Zurich Center for Economic Development of the University of Zurich, this research project will rigorously measure the impact of DDFinance’s hospital and life insurance product on low-income households’ health status, use of costly financing strategies and subjective well-being in a randomised controlled trial. The outcomes to be measured include a wide range of indicators, from health status (subjective perception, use of hospital facilities) to alternative risk coping strategies such as selling livestock. We expect the results of this evaluation to be interesting for anyone developing health coverage solutions for the underserved.

Goals and Expected Impact

The intervention will directly benefit the 9 000 individuals who will receive access to either insurance or cash subsidies and indirectly benefit their 22 500 dependents (including children). However, the project’s main impact will be to advance understanding of private, collective-based health insurance in both academic and policy circles.

The researchers expect to produce an academic paper for submission to a leading journal in development economics. The article will shed light on mechanisms through which health insurance can affect subscribers’ welfare at the individual and group levels, including health outcomes, risk management and risk coping strategies and income maintenance. Further, a policy brief targeted at stakeholders in the health insurance sector will summarise the evaluation’s key results.


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The University of Zurich is a member of the League of European Research Universities and one of the leading basic research institutions in Europe.

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