‹isin incomes mean more eoe Insurance rowth varies reative to income rowth… deendin on the eve of can afford insurance‡ economic deveoment‡ ‚emand for insurance remains imited at ow income eves‡ ‘s househods ein to e a e to meet asic needs… the a iity to afford insurance wi tyicay rise faster than income rowth‡ ‹isin incomes in the emerin markets… where the emirica income easticity of insurance demand6 is tyicay hiher than 1‡0 see —iure 2„… ena e more eoe to uy insurance‡ In non†ife… income easticity in the emerin markets overa has increased over the ast three decades ut in ife… it fe eow 1‡0 in 2006†201™‡ ˆhis was mainy due to reuatory ¢ chanes in Œhina and India that neativey affected ife remiums in 2011†1¡‡ In comarison… the income easticity of insurance demand in the advanced markets has remained at around 0‡’ in non†ife… and fe from 1‡¡ in 1’6†1’’™ to 0‡’ in 2006† 201™ in ife‡ ˆhe financia crisis may have adversey affected demand for insurance in the advanced markets… ut the decine in the income easticity aso refects the ower roensity to uy insurance at hiher income eves‡ Figure 2 2.5 €‚ƒ easticity of insurance remiums in emerin reions 2.0 1.5 1.0 0.5 0.0 Non-life Life Non-life Life Non-life Life Non-life Life Non-life Life Emerging Emerging Adanced markets Asia Latin America CEE markets 1986–1995 1996–2005 2006–2015 Note: ‚ata for Œentra and Eastern Euroe ŒEE„ for 1’6†1’’™ are not avaia e‡ Žource: ”xford Economics… Žwiss ‹e Economic ‹esearch Ÿ Œonsutin‡ ˆhe ‰‹IŒŽ have een the most rominent In recent decades… different institutions have assined what have ecome of emerin market country rouins‡ reconised names for rouins of different emerin market countries‡ ˆhe most rominent of these has een the ‰‹IŒŽ countries‡ Œoectivey… the ‰‹IŒŽ accounted for around ™™ of emerin market €‚ƒ in 201™… and ™’ of non†ife and ¢¢ of ife insurance remiums‡ Exames of other country rouins are ˜INˆ… E‘€›E and ŒIªEˆŽ… aso coections of economies exected to sustain hih rowth in the comin years‡ 6 ˆhe income easticity of insurance demand measures chanes in insurance remiums as a resut of chanes in €‚ƒ… which is a used as a roxy for tota income‡ ‘n easticity of 1‡0 means insurance remiums increase roortionay with income‡ ‘n easticity of 2‡0 means that for every 1 increase in income… remiums row 2‡ Emirica evidence shows that easticity chanes with income eves‡ Žee: ‹udof EnŠ… “ˆhe Ž†Œurve ‹eation ‰etween ƒer†Œaita Income and Insurance ƒenetration”… The Geneva Papers on Risk and Insurance, ªo‡ 2™… no‡ ¡… §uy 2000‡ 7 New reuations on ancassurance in Œhina… and for unit†inked insurance distri ution in India‡ 8 ˜INˆ ¯ ˜exico… Indonesia… Nieria and ˆurkey° E‘€›E ¯ ‰anadesh… ‰raŠi… Œhina… India… Indonesia… Iraš… ˜exico… Nieria… ƒakistan… ƒhiiines… ‹ussia… Žaudi ‘ra ia… ˆhaiand and ˆurkey° and ŒIªEˆŽ ¯ Œoom ia… Indonesia… ªietnam… Eyt… ˆurkey and Žouth ‘frica‡ Swiss Re sigma No 2/2016 ¡
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