Page 15

EAIC Today Day Three 2016

Ad proof FRIDAY News Underdeveloped markets will catch up Economic growth and a low insurance 14.10.16 penetration compared to advanced economies is set to drive re/insurance growth in developing countries in Asia such as China, India and Thailand, according to a JLT Re report titled Emerging Markets: Moving Ahead. China continues to offer considerable opportunities for domestic and foreign carriers, with several classes of business—such as property and general liability—remaining untapped, the authors wrote. China has achieved double-digit non-life insurance premium growth in recent years, driven in large part by a rapidly expanding middle class in urban areas. The country continues to experience strong economic growth as it transitions from manufacturing and industrial production to a more service-based economy. The country’s official statistics show current growth within the government’s target range of 6.5 to 7 percent as spending on infrastructure 260X170_01-15_publi_mapfrere.ai 1 30/01/15 11:19 Beijing China Bogota Colombia Brussels Belgium Buenos Aires Argentina Caracas Venezuela Labuan Malaysia Lisbon Portugal London United Kingdom Madrid Spain Manila Philippines Mexico City Mexico Milan Italy Munich Germany New Jersey USA Paris France Santiago de Chile Chile São Paulo Brazil Singapore Toronto Canada projects and a buoyant property market offset the manufacturing slowdown. Motor insurance is the largest non-life class of business for all emerging markets included in the study and makes up close to 75 percent in China. While motor has been crucial in driving the growth seen to date and is likely to remain so in the future, other non-life lines remain underinsured or uninsured, presenting alternative areas of focus for foreign companies looking to expand their presence, according to JLT Re. For example, property insurance in China, currently accounting for around 10 percent of all non-life premiums in the country, represents a small portion of the non-life market whereas property premiums can be three times as high in some developed countries. This goes a long way to explaining why insurance absorbs such small fractions of total losses when catastrophes strike China, according to the report. Marine, aviation and transport and general liability are underdeveloped, the study claims. Innovation and collaborative partnerships with governments will be crucial in narrowing such protections gaps and, ultimately, increasing insurance penetration, according to the authors. In India, JLT Re expects strong re/insurance premium growth in the non-life market. India is experiencing solid economic growth of above 7 percent. Several factors are expected to boost growth in the near future. In Thailand, non-life insurance growth is likely through to 2021 due to increasing disposable income levels and expected higher spending from the public and private sectors, according to JLT Re The country is showing signs of a sustained economic recovery after two years of subdued growth following the military coup d’état in 2014. Gross domestic product is currently growing at its fastest rate in over three years, although recent data suggest the country’s vital tourism sector is slowing, JLT Re said. n


EAIC Today Day Three 2016
To see the actual publication please follow the link above