Insurance penetration rates in emerging markets are still considerably less than in developed countries with the majority of the population remaining uninsured. There are a number of supply and demand side factors, which have led to an underinsured population. We will identify and rank these factors.
These low penetration rates are on the backdrop of a growing more educated and technologically savvy middle class. This offers tremendous opportunities for insurance companies. However, there are some key challenges that still need to be overcome in order to capitalise on this opportunity. We will consider the outlook for insurance in emerging markets, taking into account local sentiment.
Some key challenges facing insurers in emerging markets are inappropriate distribution channels, products that do not meet customers’ needs and outdated paper based administration systems. We will consider how these challenges have inhibited growth and what insurance companies can do to overcome them. We will also look at some success stories from companies, which have harnessed the power of technology through adopting new distribution channels, and developing more customer friendly products to improve their market share.
The government undoubtedly has a crucial role to play in developing appropriate regulation, and ensuring that its citizens have ample access to the benefits of insurance. Some examples include, making insurance compulsory, developing risk-based regulation, micro-insurance and establishing insurance programmes to alleviate the impact of catastrophes or weather related perils e.g. the Sugar Insurance Fund Board (“SIFB”) in Mauritius and the African Risk Capacity (“ARC”). We will consider these examples in more detail and provide local sentiment on the impact of regulation. .
Outcomes that the audience will be expected to take out of the presentation will be to understand: