According to the latest Global Insurance Potential index by MAPFRE Economics, China, the US and India currently rank top of the table of countries, both in terms of life and non-life lines.
MAPFRE’s index looks at 96 insurance markets around the world to measure the insurance protection gap and create a metric that identifies which countries offer the highest insurance potential in the medium and long term.
The indicator is based on the size of the insurance protection gap (IPG) in these markets, which now stands at $5.77 trillion globally.
According to MAPFRE, the life segment accounts for 70.8% of the global protection gap, with the remaining 29.2% accounted for by the non life segment.
“More than 70 percent of the current gap is explained by the underinsurance of emerging countries,” said Manuel Aguilera, MAPFRE Economics General Manager.
“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. The IPG in the Non-Life business has also grown over the last three decades, although significantly less.”
The MAPFRE index also accounts for variables such as insurance penetration, economy size and population size, although markets need to have a large GDP in order to be ranked and also need adequate capacity to close their own protection gap.
Nonetheless, the report recognizes the value of those countries that have ample capacity to close their own gap, but also have relatively little economic weight and are therefore placed in a low position in the ranking.
MAPFRE believes these markets represent a future source of insurance potential given their alignment, with Egypt, Pakistan and Nigeria pegged as potential contenders for top ten positions in the life segment.
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.