Nigeria, 20 other markets are ripe for insurance growth says Swiss Re

A sigma study from Swiss Re highlights the markets that present some exciting opportunities for insurance companies. The report looks at ‘frontier markets’ which have the right mix of conditions for insurance growth.

While the potential of China, India and Brazil are well known, the report looks at 21 other markets including Nigeria, Ecuador, Vietnam and Azerbaijan. These markets are typically those emerging countries with smaller-sized economies, lower income levels and insurance sectors in the early stages of development, but they are also expected to have strong GDP growth of between 5 and 10 per cent in the near term.

Insurance penetration in these frontiers is low at less than 1.5 per cent but for insurers who seize the opportunity there are potentially high rewards.

“Capturing the potential in frontier markets will require a long-term strategy. Nonetheless, this work shows that there is a real “early-mover” advantage to be gained for insurers who understand how to access and develop these markets,” says Swiss Re Chief Economist Kurl Kart. “The benefits will come once these markets reach the critical middle-income threshold when consumers and businesses start buying more insurance.”

Swiss Re says that early growth for these markets will come from life insurance and commercial lines, with personal lines developing later.