The Impact of Microinsurance on Post-Disaster Recovery Time: Evidence from Vulnerable Households in Bangladesh

Syed Lutful Kabir Chowdhury; Mohammad Zahir Raihan

doi:10.47814/ijssrr.v8i11.3069

Syed Lutful Kabir Chowdhury School of Business, Bangladesh Open University, Gazipur, Bangladesh
Mohammad Zahir Raihan School of Business, Bangladesh Open University, Gazipur, Bangladesh

DOI: https://doi.org/10.47814/ijssrr.v8i11.3069

Keywords: Microinsurance; Economic Resilience; Rural Households; Natural Disasters; Logit Regression; Climate Adaptation

Abstract

This study explores how microinsurance can help strengthen the economic resilience of poor households in rural Bangladesh after natural disasters. By analyzing data from 200 households affected by a cyclone, we used a Logit (logistic regression) model to look at how microinsurance impacts the chances of recovery, specifically focusing on whether households can fully recover within six months. In our analysis, we considered several socio-economic factors, such as household size, education level, asset value and income. Our findings indicate that microinsurance significantly increases the likelihood of a timely recovery, suggesting a strong causal link, which we further confirmed through additional robustness checks. These results highlight that microinsurance not only helps households recover more quickly after a disaster but also reduces their vulnerability to future shocks, thereby strengthening their overall resilience. This research offers important insights for policymakers, pointing to the necessity of expanding inclusive insurance schemes to enhance disaster resilience in vulnerable communities.

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