India leads the ranking for potential in both Life and Non-Life from a total of 96 markets analyzed.
MAPFRE Economic Research has updated its Global Insurance Potential Index (MAPFRE GIP) with the latest available data from 2018. The purpose of this indicator, calculated for 96 insurance markets (including both developed and emerging markets), is to measure the insurance protection gap worldwide by creating a metric that summarizes which markets offer greater insurance potential in the medium- and long-term.
This indicator is based on the estimated size of the Insurance Protection Gap (IPG) in these markets
First introduced last March, this indicator is based on the estimated size of the Insurance Protection Gap (IPG) in these markets, as well as their ability to narrow it. The IPG represents the difference between the insurance coverage that is economically necessary and beneficial to society and the amount of coverage which is actually acquired. It is not a static concept, but rather evolves in accordance both with the growth of a country’s economy and population, and with the emergence of new risks inherent to economic and social development.
As well as the IPG, the MAPFRE GIP also takes other variables into account, such as penetration (premiums/GDP), economy size and population size, etc. In short, it provides a score to put markets in order on the basis of their potential contribution to closing the global insurance gap. In order to be highly placed in the ranking, markets therefore need to be large in size (measured in terms of their GDP) and also need to have adequate capacity to close their own IPG.
The report stresses the value of those countries which have ample capacity to close their own gap
Nonetheless, the report stresses the value of those countries which have ample capacity to close their own gap, but which also have relatively little economic weight and are therefore placed in a low position in the ranking. The report places great emphasis on this group of countries since, thanks to their alignment with one another, they represent a future source of insurance potential. There are, for example, four countries (Egypt, Pakistan, Nigeria and the Philippines) that, in the Life segment, could be contenders for those top-10 positions currently occupied by other emerging markets. Within the Non-Life line, Pakistan, Egypt, Bangladesh, Nigeria, and the Philippines have been identified as countries with huge potential to reduce their domestic insurance gap. Moreover, if they were to grow in size, in the long-term they could rise above other emerging markets.
You can read the full report here.