Introduction: which are the frontier markets? Emerin markets have consistenty ˆhe emerin markets have rown more raidy than advanced markets in ¡ of the ast 4™ years‡¡ outerformed the advanced markets ‘verae annua rea €‚ƒ rowth was ™‡0 etween 1’¢0 and 201™ 4 in terms of economic rowth‡ comared with 2‡6 in the advanced markets‡ In €‚ƒ terms… the emerin economies exanded eiht†fod in that eriod‡ ‰y 201™… they accounted for cose ™ to 40 of word €‚ƒ… u from around 1™ in 1’0‡ ˆhis rowth has fitered throuh into ˆhe stron rowth in emerin economies has fitered throuh to their insurance countries’ insurance sectors… and there sectors… with the atter coectivey rowin at around dou e the rate of the is ame scoe for further industry underyin economy in the ast 20 years‡ Insurance enetration… defined as deveoment‡ remiums as a ercentae of €‚ƒ… in the emerin markets rose to 2‡¢ in 201™ from 1‡¢ in 1’’™‡ £owever… this increase came from a ow ase and the emerin markets’ tota share of o a ife and non†ife remiums remains eow 20… ess than haf the markets’ share of o a €‚ƒ see —iure 1„‡ In other words… there is sinificant catch†u otentia for insurers in the emerin economies‡ Figure 1 40% Emerin markets’ share of o a €‚ƒ… 35% non†ife and ife remiums… 30% 19.2% 25% 20% 15% 10% 12.1% 12.4% 5% 0% GDP Non-life premiums Life premiums 1980 2000 2015 Žource: ”xford Economics… Žwiss ‹e Economic ‹esearch Ÿ Œonsutin‡ 3 ˆhe desination of the economies in this sigma as “advanced” or “emerin” is eneray in keein Internationa ˜onetary —und I˜—„ conventions‡ ‘dvanced markets incude the ¥Ž… Œanada… ¦estern Euroe excudin ˆurkey„… Israe… ”ceania… §aan and the other advanced ‘sian economies‡ ¦ith the excetion of ŒŠech ‹eu ic… Estonia… Žovenia and Žovakia… a other markets are cassified as “emerin” in keein with the I˜—’s criteria for “emerin and deveoin” economies‡ 4 ¥ness otherwise stated… a rowth rates indicate chanes in rea terms that have een ad“usted for oca consumer rice infation‡ 5 ˆhe deveoment of the emerin markets is more dramatic when assessed in terms of urchasin ower arity ƒƒƒ„‡ —or exame… atest estimates y the I˜— shows that emerin markets were aready on ar with advanced†market €‚ƒ ased on ƒƒƒ terms in 200¢†200‡ ‰y 2020… they are exected to account for more than 60 of word €‚ƒ in ƒƒƒ terms… ut ony 4¡ if €‚ƒ is measured in ¥Ž doar terms‡ Žource: World Economic Outlook Database, I˜—… ”cto er 201™‡ 2 Swiss Re sigma No 2/2016
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