MAPFRE’s Global Insurance Potential Index is calculated for 96 insurance markets (including both developed and emerging markets), and its aim is to measure the insurance protection gap across the globe by identifying the markets offering the highest insurance potential in the medium- and long-term.
The indicator identifies that China, the US and India have the highest insurance potential out of the 96 countries included in the Index, in that they have a large insurance protection gap (IPG) and ample capacity to close it.
MAPFRE explains that the Life segment accounts for 70.8 per cent of the IPG, with the remaining 29.2 per cent accounted for by the Non-Life segment (respectively US$4.09 trillion and $1.7 trillion; and 466 and 193 basic points of global GDP).
The Non-Life business IPG has increased
“More than 70 per cent of the current gap is explained by the underinsurance of emerging countries. In this sense, the aging populations, their income growth and size are factors that determine the widening insurance gap for the Life business in these countries,” said Manuel Aguilera, MAPFRE Economics General Manager. “The IPG in the Non-Life business has also grown over the last three decades, although significantly less.”
Emerging competitors in the Non-Life line
While some countries are currently not identified as top rankers in terms of insurance potential (in that they have ample capacity to close their IPG, but not enough economic weight to currently do so), they do have the ability to rise through the rankings in the future. Within the Non-Life line, MAPFRE identifies these key players as being Pakistan, Egypt, Bangladesh, Nigeria and the Philippines (in that order), as they have ‘huge potential’ to reduce their domestic insurance gap. “Moreover, if they were to grow in size, they could, in the long-term, rise above other emerging markets in the index,” MAPFRE said.