Abstract:
The paper asks what drives insurance coverage in low income households by analysing repurchase
patterns of micro-insurance policies. We use data on customers of a financial services provider from
three states in India and find that the probability of repurchase is highest in the first two months after
the contract expires, and steadily declines after. This suggests a window of opportunity for financial
firms and governments to target customers to ensure continuous insurance purchase. Non-membership
of micro-finance groups and poor rainfall in the month of expiry affect the chance of repurchase
adversely. Customers who take longer to repurchase tend to increase the amount of insurance cover.
