Insuring the emerging and frontier markets ƒroduct and distri ution strateies ˆhere is no “one†siŠe†fits†a” aroach ˆhere is no “one†siŠe†fits†a aroach” for exansion into the emerin and frontier for enterin frontier markets‡ markets‡ ˆhe diversity of insurers’ strateies demonstrates the imortance of ayin attention to the unišue socio†economic… reuatory and cutura characteristics of different markets‡ ±ey characteristics to aue incude: ̤ ‘wareness of financia roducts in enera… and insurance in articuar… is ow in the frontier markets‡ ‘ ack of financia iteracy is most rominent in rura areas‡ Œonsumers may not understand the vaue and enefits of insurance‡ ‚emand is mosty driven y comusory rešuirements ike ˜ˆƒ› cover‡ ̤ ‘fforda iity is crucia‡ ƒroducts which are ouar in mature and advanced markets may not e suita e for emerin and frontier markets‡ ˆhis can imit demand for risk roducts in the atter… ut consumers may nonetheess e interested in insurance as a savin and investment vehice‡ ̤ —ramented markets… articuary in countries with ow eves of ur anisation… increase the difficuty of reachin rura areas where the ma“ority of eoe tyicay reside‡ ̤ ˆhere are aso oerationa issues… incudin a ack of underwritin data as the socia and demorahic andscae chanes raidy‡ ƒroducts are taiored to meet customer Insurers face a unišue com ination of chaenes when enterin emerin and rešuirements in different emerin and frontier markets‡ ˆo tacke the ack of consumer awareness around enefits of frontier markets‡ insurance… and aso the rice sensitive nature of the markets… some insurers adot an a†in†one roduct stratey aroach to offer comrehensive rotection and savins otions‡ In ess deveoed markets… sime roducts with hih afforda iity can e more successfu‡ ”f ate… sime… interated savin and rotection covers have een ecomin more ouar… whie riders are offered for various ife events to address customer’s different rotection needs‡ —or exame in ˜exico… ˜et›ife ses a sime 4¡ universa ife roduct… ut with 1 otiona riders for different ife events‡ Investment remains a key theme for ife Investment and savins remain a key motivation for the urchase of ife insurance in insurance in these markets‡ emerin and frontier markets… as refected in the ouarity of “return of remiums” and investment uarantee features in ife and heath roducts‡ Even in reativey advanced markets with deveoed ešuity markets ike ˜aaysia… Indonesia… ˆhaiand and some ŒEE markets… the roduct mix is shiftin towards unit†inked roducts with ow uarantees‡ ˆhese are deemed more caita efficient with hiher marins and shorter ay ack eriods… and can aso cater to a cient’s investment needs‡ In distri ution… aents remain the main ‘s in advanced markets… an insurer’s distri ution stratey is critica‡ ˆo exand channe in many frontier markets … their reach… many insurers in emerin and frontier markets emoy a muti†channe distri ution aroach‡ In many countries… aents remain revaent owin to their reach in tier two and three cities‡ ‘ttractin oca taent in the aency framework is a core art of stratey… and insurers have een investin in increasin aent roductivity throuh trainin and education‡ In many markets there has een a nota e shift to ancassurance… which has ecome one of the fastest rowin channes‡ ”nine channes are aso ein used‡ 43 ”atin merica Investor Da presentation, ˜et›ife… 11 ˜arch 201™… htt://www‡sec‡ov/‘rchives/ edar/data/10’’21’/00011’¡12™1™06416/d™2¡6dex’’1‡htm 2 Swiss Re sigma No 2/2016
Insuring The Frontier Markets Page 28 Page 30