Coordinating distributed knowledge to design a multi-hazard microinsurance product for low-income households in South Africa

This study examines how coordinated knowledge can inform multi-hazard microinsurance for low-income households in Buffalo City Metropolitan Municipality (BCM), South Africa. Researchers combined a structured co-design workshop with 21 purposively selected stakeholders from five institutional categories and a household survey of 390 respondents. Four mixed stakeholder groups completed five activities, including product design, behavioural-barrier diagnosis and resource prioritization. The survey measured stated willingness to pay (WTP) across income groups in 18 urban areas. The study compared workshop outputs with survey results to identify design elements supported across evidence sources.

Stakeholders and survey evidence supported community-based distribution, public co-financing, rapid trigger-based payouts and monthly premiums of R50–R100, although that price was not the most common choice among low-income respondents. WTP differed significantly by income, and 25.7% of low-income respondents stated zero WTP. The authors propose the BCM Community Shield, including a subsidized tier, but stress that its features are untested and that adoption and commercial viability remain unestablished. They recommend testing product attributes with households, modelling expected losses using ward-level data, engaging licensed insurers and regulators, and piloting the concept while monitoring uptake and renewal.