Insurance market outlook Insurance is under†deveoed… and ˆota remiums coected in 201™ raned from ¥Ž‚ 0‡ iion in Žri ›anka to reuations are ein tihtened‡ ¥Ž‚ 2‡¡ iion in ƒakistan‡ ”vera insurance rowth in the three markets averaed ‡ in nomina terms etween 200 and 201™‡ ƒenetration is ow… refectin the eary stae of insurance deveoment‡ ¦hie non†ife is more deveoed in Žri ›anka… in ‰anadesh and ƒakistan enetration is hiher in ife than in non†ife insurance‡ ‘art from ow incomes… overnment initiatives and reuatory chaenes are constrainin enetration‡ In Žri ›anka… overnment rovisions of free heathcare and education… and a ension scheme for u ic†sector emoyees… have reduced the incentive to sin u for rivate insurance‡ ‘t the same time… insurers are facin ressures to meet various new reuatory rešuirements… incudin hiher aid†u caita… the sittin of comosite usinesses and the introduction of a risk† ased caita reime in 2016‡ In ƒakistan… a ow aid†u caita rešuirement has ed to a are num er of smaer ayers which ack the resources to invest in underwritin and distri ution‡ Nevertheess… there coud e market consoidation with the endin rešuirement to increase aid†u caita to ƒ±‹ ™00 miion for non†ife comanies… and ƒ±‹ ¢00 miion for ife ayers… y ¡1 ‚ecem er 201¢‡ In addition… a hih eve of unaid remiums mainy in non†ife„ remains a concern‡ ˆhe ‰anadeshi market is simiary ouated y many sma ayers‡ —or instance… there are ¡0 ife insurers with the ma“ority writin ess than ‰‚ˆ ™00 miion ¥Ž‚ 6‡1 miion„ in remiums‡ Œonsoidation is ikey once new rues for sovency and caita take effect‡ ‡ortunities ˆhere is a rane of oortunities in these Insurance rowth in these Žouth ‘sia markets wi continue to derive suort markets… a sent disrutive drivers‡ from sta e economic rowth… averain ™†¢ over the next five years‡ ”ther fundamentas… incudin hih natura catastrohe exosures… increasin ur anisation and a risin midde income cass… wi add to demand for insurance‡ ˆhe imementation of hiher caita and sovency standards amon other reuatory measures… wi he to imrove market efficiency and encourae consoidation‡ Figure 11 Non-life insurance ‹ea rowth of insurance remiums in ‰anadesh… ƒakistan and Žri ›anka… 30% 200’–201™E… Sri Lanka 20% Pakistan 10% Bangladesh 0% –10% 2009 2010 2011 2012 2013 2014 2015E Life insurance 30% 20% 10% 0% –10% 2009 2010 2011 2012 2013 2014 2015E Bangladesh Pakistan Sri Lanka E ¯ estimates‡ Žource: Žwiss ‹e Economic ‹esearch Ÿ Œonsutin‡ Swiss Re sigma No 2/2016 2¡
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