Introduction: which are the frontier markets? ”f ate… there has een rowin interest ˆhe non†‰‹IŒŽ emerin market countries are siŠea e… accountin for 1 of in the “frontier markets”‡ o a €‚ƒ 2¢ in urchasin ower arity terms„ and 42 of word ouation‡ ˆheir economic rowth has consistenty exceeded that of the advanced markets‡ ”f ate… in insurance a su set of the non†‰‹IŒŽ countries has een ainin increasin attention: the “frontier markets”‡ ˆhe term was first used more than two decades ao to denote ešuity markets that were sma and ess accessi e… ut sti considered investa e‡ ˆhere is no areed definition of frontier markets‡ —or the uroses of this sigma… they are considered to e the ess†esta ished insurance markets in smaer emerin economies… with a romisin rowth outook‡ ˆhe markets tyicay feature the foowin characteristics: ‰roady defined… the frontier markets 1‡ ›ow insurance enetration‡ —rontier markets are usuay at an eary stae of have ess esta ished insurance sectors economic and insurance deveoment‡ Insurance enetration is ow and there is and sma economies‡ hih catch†u otentia‡ Žome markets may retain ma“or arriers to entry and ack advanced insurance reuations‡ 2‡ ›ow income‡ ‘nother usua characteristic of frontier markets are ow income eves‡ ˆhere are excetions… for exame hiher†income emerin markets where insurance is sti heaviy under†deveoed due to reuatory and other socia and cutura reasons‡ ‘nd there are aso ow†income†eve markets with aready more advanced insurance sectors iven a history of i era entry of forein insurers into the market‡ ¡‡ Žma economies‡ —rontier insurance markets are usuay in smaer†siŠed emerin economies‡ ˜ost are emerin markets have we†esta ished insurance sectors with oth domestic and forein ayers‡ 4‡ Žtron economic rowth otentia‡ ƒerhas the most imortant attri ute of frontier markets is their stron rowth otentia‡ ˆhe otentia oortunity in insurance is continent on ro“ected economic rowth‡ ‹euations… ease of forein insurer entry ˆhis sigma uses these criteria to define frontier markets and review the rosects of and financia market i eraisation are a seect set of countries‡ ”ther factors are aso evauated to achieve a etter sense of other factors that can affect the insurance market otentia‡ In articuar… reuatory frameworks and the accetance deveoment of insurance markets‡ of forein insurers to enter the market can reaty infuence the deveoment of a country’s insurance sector‡ ‘so… insurers in countries underoin financia sector reform and market i eraisation coud exerience stroner rowth than those oeratin in more restrictive environments‡ ˆa e 1 ists the frontier markets incuded ˆa e 1 incudes the key characteristics of the frontier markets reviewed in this in this sigma‡ sigma‡ ˜any other countries šuaify as frontier markets… ut sometimes ack sufficient data to assist in anaysis‡ ”thers are frontier markets… ut with ow otentia due to reuatory and ea issues‡ 4 Swiss Re sigma No 2/2016
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