Understanding the micro-insurance landscape in low-income communities

The challenge

Partners: FSD Kenya, AccessAfyaAs an alternative private health financing for low-middle-income households, health insurance has not gained traction in the Kenyan market. Insurance penetration remains at a paltry 3%, while National Hospital Insurance Fund coverage is at 26%, denying the majority of the population an essential shield against health shocks. Among the reasons for the low uptake of insurance among Kenyans is little knowledge of the importance of health insurance and the affordability of this option leading households to not prioritise it.
How might we deepen our understanding of the healthcare & micro-insurance landscape among low-income populations? How might healthcare be sustainably financed?


● Assess the market opportunity for micro-insurance and other health finance solutions for low-income households.● Investigate the Utamu membership plan product sustainability (pricing, terms, assumptions, and data analysis of early users) given other healthcare solutions/offers targeted at the same market segment.● Refine the product using a Human Centered Design approach with current customers and other patients in Access Afya’s catchment (including strategies to minimize adverse selection)

Our approach

We used a combination of qualitative and quantitative methods to understand the lives of low-income earners’ needs, challenges and desires in relation to health expenses and financing through prepayment on Utamu.

  • Focus group discussions

    We conducted 4 focus groups discussions. We supplemented the discussions with light participatory activities to better understand needs, preferences and expectations.

  • 1-1 Contextual interviews

    We interviewed Utamu program members and non-members, documenting their attitudes and behaviors. We sought to understand the drivers and barriers they encountered during health shock.

  • Key stakeholder interviews

    We spent time with members of staff clinicians, their assistants and franchise owners. We also spoke with business owners and micro-insurance experts.

  • Data analysis & concept design

    Analysed data collected, synthesised insights identified opportunities and developed hypothesis and prototypes for testing.

Topic areas

Financial Inclusion, Digital Inclusion

Project type

HCD research and design, Product design & testing

Overview of health financing in Kenya

State of health service financing in Africa

● Research showed that households in developing countries spent $148 billion out-of-pocket for healthcare expenses in 2015, and each year 100 million people are pushed into extreme poverty because of the high cost of healthcare. Most Kenyans pay for their healthcare “out of pocket”. The private sector funds approximately 67% of Kenya’s healthcare sector and the public sector funds 33% of total healthcare expenditure. 45% of Kenyans forgo receiving treatment due to cost barriers for private healthcare.● When it comes to insurance, only 11% of Kenya’s population have health insurance. The National Health Insurance Fund (NHIF) coverage makes up 70% of the market share and patronage is mostly limited to those in formal employment. Public health facilities are affordable but face frequent stockouts, understaffing and negative perception of quality of healthcare due to chronic underfunding. There are many reasons for this poor uptake of health insurance, but the prime reasons include the lack of universal health coverage, expensive private health insurance and a culture that does not value health insurance. Out of 40 million Kenyans, there are 38 million Kenyans who do not have health insurance. In Kenya of those who have health insurance, 3% are mainly employer based health insurance schemes. Health care in Kenya is funded through out of pocket expenditure, government funding and donors.

*How households finance their health events.

Dealing with shocks device



    Social networks (Borrow from friends and family)
    Personal (sell assets/livestock/poultry, get additional work,
    cut back on expenses
    Formal(Use savings or borrow from formal institutions such as banks/MFIs/SACCOs,excluding insurance
    Informal (Borrow savings from informal providers such as shylocks, chama, employers,shopkeeper,secret hiding place
    Did nothing
    Insurance Pension

Sources FinAccess 2019Business of health in Africa,IMF World Bank

Health expenditure takes a up a significant portion of household income

(average amount per month of household medical expenditure )


No spend Spent up to KES 3,000

Of both genders, Living in urban areas, ages 25-39, Q2-3

50% of Kenyan households have an annual household income of KES 12,000 and under. Research shows that in 2016, annual Total Health Expenditure (THE) per capita was KES 7,800. In our research we heard in some low-income urban-based dwellings, users can spend as low as KES 200 - 1,500 at community health facilities per quarter. Other users spend a minimum of KES 2,000 - 5,000 on a single outpatient event (at mid tier health facilities) - driven by high medication and lab costs. For example, consultation for patients who don't buy medicine can range from KES 200 - KES 1,000. Tests vary between KES 500 - 5,000. By contrast, in rural areas, low-income persons spend between KES 200 - 1,500 for outpatient expenses.

Women take up greater responsibilities for healthcare of their households than men do. They form a significant portion of target market for Access Afya. Older single heads of households have fewer social safety nets and support to meet the health needs - the effect of which is amplified more in rural areas. Urban dwellers show higher digital literacy levels, 91% have access to a mobile phone, 34% own a smartphone ownership and 77% of the population have internet access. They thus have a wider pool of possible financing options for health shocks.
Sources: IPSOS 2018: Kenya Health Financing System Report, 2018, USAID & Health Policy Plus; FSD FinAccess 2019

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