Œoncusions Emerin and frontier markets are ma“or ˆhe emerin market countries have diverse economies at different staes of drivers of o a insurance usiness deveoment‡ Œoectivey… they reresent a ma“or share of o a outut and their rowth‡ contri ution wi increase in the comin decades‡ ‘s such… o a insurance rowth wi increasiny e driven y deveoments in the emerin markets‡ ‘art from the stron erformance of the ‰‹IŒŽ and other esta ished emerin markets… there is aso usiness otentia in smaer frontier markets‡ —rontier markets in ŽŽ‘… ŒIŽ and —rontier markets are reativey sma and ess deveoed than esta ished and are emerin ‘sia are exected to emerin markets‡ £owever… individua markets or ocs of economies can sti offer outerform in the mid to on term‡ sinificant scae and uift to insurance remium rowth‡ ˆhere are cear drivers that wi ikey roe faster insurance deveoment in some markets‡ In ŽŽ‘… deveoment of natura resources and economic rowth wi fiter throuh to increase insurance enetration‡ In other ŽŽ‘ countries… such as ±enya… a soid reuatory framework and new technooies are drivin rowth‡ ˜eanwhie in Žoutheast ‘sia… Œam odia… ›aos… ˜yanmar and ªietnam are set to enefit from the formation of the ‘ŽE‘N Economic Œommunity and the imementation of Œhina’s ”ne ‰et… ”ne ‹oad ”‰”‹„ initiative… which wi aso resent new insurance oortunities‡ ˆhe ”‰”‹ wi enefit some ŒIŽ economies… incudin €eoria… ±yryŠstan… ˜odova and ¥Š ekistan… which shoud see imrovin rowth aso due to recovery in Euroe‡ In ›atin ‘merica… the radua sreadin of market i eraisation oicies is enefitin the insurance sector‡ ˆhe deveoment of the insurance €o a insurers are seekin to enter the frontier markets… takin advantae of sectors in frontier markets wi foow i eraiŠation of entry reimes‡ ˆhere are some common features to the insurance unišue rowth aths‡ sectors in the frontier markets: ̤ Non†ife roducts tend to dominate in the eary staes of deveoment° ̤ Œommercia insurance eads ersona ines° ̤ ‘ stron emhasis on savins instead of rotection roducts in ife insurance° ̤ ‘fforda iity is a rime consideration° ̤ ›ow awareness of insurance amon the ouation° and ̤ ›ow financia iteracy‡ ˆechnooy can he insurers in frontier ¥nravein these ocation†secific ermutations is key to the success of a o a markets ea†fro to atest roducts and insurer seekin to enter a new frontier market‡ Noteworthy too is that emerin and underwritin technišues‡ frontier markets do not necessariy foow the same insurance rowth ath of the advanced markets‡ ˆhe exerience of some esta ished emerin markets ike India and Œhina shows decades of insurance sector rowth can e comressed into a few years‡ ˆechnooy can aso he the industry ea†fro to the atest roducts or underwritin technišues‡ Swiss Re sigma No 2/2016 ¡1
Insuring The Frontier Markets Page 31 Page 33