Insuring the family or the asset? Framing effects on insurance demand

Despite its potential to protect vulnerable households, demand for index insurance remains low. One explanation is product framing: in pastoralist settings, index insurance is typically marketed as “livestock insurance,” framing it around a specific asset rather than around household consumption. We test whether reframing insurance around household welfare increases demand, using a lab-in-the-field experiment with 287 couples in Northern Kenya. Participants exposed to a “family framing” that describes payouts as funds for household expenses allocated about 22% more of their budget to insurance (1.1 percentage points from a baseline of about 5%) than those exposed to the standard livestock framing. Because each spouse makes their own decisions, we observe both partners within the couple, and the family framing raises demand for both husbands and wives. The results suggest that how insurance is presented can affect demand.