Catering for the informal sector on formal medical insurance products.

Abstract

Zimbabwe has been experiencing a growing informal economy mainly attributable to the harsh economic conditions that have forced most formal business to operate below capacity or in some cases completely shut down operations. These challenges have negatively affected the employment rate and has drove the growth of the informal sector. The aim of the study is to assess the readiness of medical insurance products to extend cover to this growing market. Medical insurers have often focused on servicing the formal sector and the changes may have caught them un-prepared. Government policy and strategy on financial inclusion has often neglected health insurance. Literature has more often focused on banking and micro insurance in as far as financial inclusion is concerned and there has been little emphasis in as far as medical insurance is concerned. In addition, literature most often assumed that the informal sector has lower incomes and have no capacity to subscribe for medical insurance. The researcher adopted quantitative research methods as the researcher sought to get insights on the subject. The study’s main findings were that there is income capacity within the informal sector to subscribe to medical insurance. However, the major hinderance has been the lack of suitable medical insurance products that well-tailored to address the needs of this sector. In addition, Government has not made a deliberate effort to promote financial inclusion in as far as medical insurance is concerned with the informal sector.