Understanding market demand: How to use focus group discussions in the development of inclusive insurance

Understanding market demand is a critical step in the process of developing solutions to meet the risk management needs of rural poor people, particularly with regard to insurance. What seems like a clear need (such as farmers managing losses resulting from drought) does not always translate into demand for insurance (farmers actually wanting to buy insurance to protect against the effects of these risks).

It is essential to understand the other factors that affect farmers’ purchase decisions and/or insurers’ ability to offer a valuable risk management solution. These include low-income client perceptions and beliefs, accessibility, affordability, preferences and household economics.

A clear picture of these other factors also informs the decision on whether insurance is appropriate for a particular context and target group, which is not always the case. This clarity helps identify key components that should be included in market education and selling practices.