Insurin the emerin and frontier markets Insurers have a on history of investin €o a insurance comanies 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 aso withdrawas when thins have not one to an‡ ˆo reaise the otentia of these markets necessitates a on†term stratey‡ Insurers enter frontier markets in art to ain the “eary†mover” advantae‡ ˆhe aim is to e we†ositioned when the markets reach the critica midde†income threshod when consumers and usinesses start uyin more insurance‡ ˆhe tyica rowth ath of insurance in ˆhe rowth of insurance in frontier markets features some common atterns‡ frontier markets has imications for entry ¥nderstandin these is critica to definin an insurers’ entry and oeratin stratey‡ and oeratin strateies‡ ̤ Non†ife insurance in frontier markets usuay makes u the ier art of remiums in the eary stae of deveoment‡ In non†‰‹IŒŽ emerin markets… non†ife accounted for 60‡ of tota remiums in 201™‡ In comarison… in the more deveoed ‰‹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 exame: non†ife accounted for amost a remiums in 1’0 ut “ust ¡1‡2 in 200¡… shorty after its accession to the ¦ˆ”‡ ̤ In non†ife insurance… commercia motor… roerty… fire and marine… aviation and transort ­˜‘ˆ„ ines are usuay the first to deveo‡ €rowth in ersona ines comes ater‡ ̤ ˆhe non†ife market is tyicay more framented and ife more concentrated‡ ˆhe eve of concentration wi increasiny deend on reuation… incudin the introduction of more strinent sovency caita rešuirements in frontier markets‡ Insurers can aso face scaa iity In addition… scaa iity can e chaenin… iven the sma siŠe of markets in chaenes in frontier markets‡ eary stae of deveoment‡ 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 scae‡ ›everain technooy and new usiness modes ­e… coa oratin with N€”s to suort micro†insurance rorams„ are other otions to uid scae‡ 32 ˆhere are… as aways… excetions‡ —or instance… non†ife insurance remains the dominant force in ‹ussia… and India has had a stron ife sector since the eary stae of insurance deveoment‡ 24 Swiss Re sigma No 2/2016

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