Abstract: We explore the benefits of partnerships between governments and private insurers in the context of inclusive insurance (also referred to as microinsurance), as powerful and cost-effective tools for achieving poverty reduction. To explore these ideas, we model the capital of a household from a ruin-theoretic perspective to measure the impact of microinsurance on poverty dynamics and the governmental cost of social protection. We compare a few scenarios: uninsured, insured without subsidies and insured with various subsidies. Although insurance alone (without subsidies) may not be sufficient to reduce the likelihood of falling into the area of poverty for specific groups of households, since premium payments constrain their capital growth, our analysis suggests that subsidised schemes can provide maximum social benefits while reducing governmental costs.

Biography: Dr. Constantinescu received her PhD in Mathematics from Oregon State University in 2006. Prior to graduate studies, Corina worked as an actuary and led the life insurance department of one of the first private Romanian insurance companies. During 2013-2016 she coordinated the EU-funded RARE network, connecting 12 prominent international institutions to work on the theoretical side of the analysis of ruin probabilities in case of disasters or extreme shocks for insurance-like risk pools. The RARE research led to the introduction and analysis of new risk measures and the (asymptotic) quantification of aggregated risks. Since 2018, Dr. Constantinescu is regularly teaching and supervising MSc students from the African Institute of Mathematical Science (AIMS) network. In 2020, she was one of the two academics named on the 100 Women to Watch list of the Cranfield University’s School of Management. Dr. Constantinescu publishes in both actuarial and applied probability journals. She serves as associate editor in a number of actuarial journals and is part of the publicity team of Bernoulli Society for Mathematical Statistics and Probability. Her expertise is in modeling insurance portfolios' dynamics and their response to solvency requirements. Her current interest is in the mathematics of insurance for (low-income) populations that cannot afford insurance. During her sabbatical year, 2022-23, she explores these financial inclusion aspects as a visiting scholar within the Social Finance Programme, International Labour Organization, United Nations.