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Barriers to providing insurance in emerging markets

01 February 2017

Major insurers are currently experiencing limited growth opportunities in the developed economies of North America and Western Europe. In 2015 emerging markets accounted for just over 7.26% of global insurance premiums, according to Axco's report 'Embedding Insurance in the Frontier Markets: Partnerships for Emerging Opportunities'.

The potential opportunities are considerable: per capita spend on insurance in emerging markets (excluding China) is a mere 3.21% of that in advanced markets and the average insurance penetration in emerging economies actually decreased by 0.09% in 2015.

Closing the protection gap particularly in South Asia and Sub-Saharan Africa offers the greatest opportunities, bolstered by an increased demand for insurance from a growing population and middle class.  This is tempered however by the fact that insurance markets in many emerging countries are relatively immature compared to their western-based counterparts and, as mentioned above, there can be significant barriers to entry and investment, many of which may be cultural as well as legislative. 


Barriers to Insurance

The report argues that public-private partnerships (PPP) could unlock huge opportunities in Africa and elsewhere for (re)insurance companies and global investors but this can only happen if education, regulation and government support are allied to industry engagement.

Please contact your Axco representative for a copy of the full report