MAPFRE: China, the US and India drive insurance’s potential
A new report from MAPFRE’s data and insights arm (MAPFRE Economics) has concluded that China, the US and India insurance markets possess the most potential.
Measuring information from 96 markets, including developed and emerging markets, the company’s aim is to discover insurance protection gaps globally. Currently, this gulf is calculated to be approximately US$5.8trn.
MAPFRE’s summarised findings across both non-life and life cover found that the aforementioned countries possess significantly more potential in the medium and long-term. The other countries included in the top 10 were (in order): Russia, Indonesia, Germany, Japan, Brazil, Turkey and Mexico.
Addressing the insurance gap
As we previously discussed, the insurance gap in emerging or underdeveloped markets is a growing issue and one which new insurtechs hope to address. The problem, at least in countries such as Indonesia, appears to be a low rate of insurance literacy (15.8%), high rates of poverty (43% at the threshold) and little trust financial institutions.
Finding adequate solutions to address these issues across underserved markets will be crucial to addressing the insurance gap overall, a course of action that Manuel Aguilera, MAPFRE Economics General Manager, seems to agree with:
"More than 70% of the current gap is explained by the underinsurance of emerging countries. In this sense, the ageing populations, their income growth and size are factors that determine the widening insurance gap for the Life business in these countries.”
Potential in 2021 and beyond
MAPFRE notes that, with the exception of Russia, the top 10 countries showing the most potential in insurance have not significantly changed between 2019 and 2020.
Despite this, a number of countries in Asia and Africa are demonstrating medium-high (or Tier 2) development potential. These include Nigeria, Egypt, South Korea, Thailand and the Philippines.
Although it is unlikely that 2021 will see a substantial shift in China’s, the US’ and India’s dominance in the top three, the fruitful efforts of insurtechs in developing markets, which are promoting inclusion, financial democratisation and representation, could see the insurance gap slowly beginning to be bridged.
