Partner-Agent Model Practice and Microinsurance Appropriateness in Tanzania: Any Nexus?

Abstract

This paper examines the role of the Partner-Agent model practice in enhancing microinsurance appropriateness among microfinance institutions (MFIs)’ clients in Tanzania. The study adopts a quantitative technique based on primary and secondary data sampled randomly from 229 MFIs selected from ten regions, the most prone to disaster risks, in Tanzania. The Hierarchical Regression Analysis was used for the empirical investigation. The results indicate that the collaboration between the agent and the partner during microinsurance product design, sharing business information between the agent and the partner, integration of parties’ respective core competencies, transfer of specialized knowledge and parties’ compliance to contractual obligations have a positive and significant effect on microinsurance appropriateness. The Partner-agent model practice and microinsurance client-value are nascent phenomenon in Tanzania. Thus, these areas have not yet attracted the attention of many researchers. This foundational study is, therefore, original and most relevant to MFI managers and insurance regulators to enhance microinsurance client-value. The Tanzania Cooperative Development Commission, Tanzania Association of Microfinance Institutions and the Tanzania Insurance Regulatory Authority are recommended to coordinate and regulate the partner-Agent model practice to enhance the provision of appropriate microinsurance services.