Insurin the emerin and frontier markets Insurers have a on history of investin €o a insurance comanies are no straners to frontier markets‡ ˜any esta ished in frontier markets‡ emerin markets were considered “frontier” when o a ayers first set foot in them‡ ˆhere have een successes… and aso withdrawas when thins have not one to an‡ ˆo reaise the otentia of these markets necessitates a on†term stratey‡ Insurers enter frontier markets in art to ain the “eary†mover” advantae‡ ˆhe aim is to e we†ositioned when the markets reach the critica midde†income threshod when consumers and usinesses start uyin more insurance‡ ˆhe tyica rowth ath of insurance in ˆhe rowth of insurance in frontier markets features some common atterns‡ frontier markets has imications for entry ¥nderstandin these is critica to definin an insurers’ entry and oeratin stratey‡ and oeratin strateies‡ ̤ Non†ife insurance in frontier markets usuay makes u the ier art of remiums in the eary stae of deveoment‡ In non†‰‹IŒŽ emerin markets… non†ife accounted for 60‡ of tota remiums in 201™‡ In comarison… in the more deveoed ‰‹IŒŽ countries… non†ife remiums were 41‡6 of the tota‡ ̤ ˆhe share of ife remiums increases as insurance enetration rises‡¡2 Œhina is a strikin exame: non†ife accounted for amost a remiums in 1’0 ut “ust ¡1‡2 in 200¡… shorty after its accession to the ¦ˆ”‡ ̤ In non†ife insurance… commercia motor… roerty… fire and marine… aviation and transort ˜‘ˆ„ ines are usuay the first to deveo‡ €rowth in ersona ines comes ater‡ ̤ ˆhe non†ife market is tyicay more framented and ife more concentrated‡ ˆhe eve of concentration wi increasiny deend on reuation… incudin the introduction of more strinent sovency caita rešuirements in frontier markets‡ Insurers can aso face scaa iity In addition… scaa iity can e chaenin… iven the sma siŠe of markets in chaenes in frontier markets‡ eary stae of deveoment‡ In some cases… insurers focus on a rou of reiona markets rather than “ust one country to ower usiness costs… and take advantae of other economies of scae‡ ›everain technooy and new usiness modes e… coa oratin with N€”s to suort micro†insurance rorams„ are other otions to uid scae‡ 32 ˆhere are… as aways… excetions‡ —or instance… non†ife insurance remains the dominant force in ‹ussia… and India has had a stron ife sector since the eary stae of insurance deveoment‡ 24 Swiss Re sigma No 2/2016
