Reinsurance News

Technology and government initiatives key to emerging markets: Swiss Re

10th September 2017 - Author: Staff Writer

Innovative use of insurance platforms, technology, and government initiatives have been key to getting markets off the ground in emerging regions, said Swiss Re Chief Economist Kurt Karl and CEO of Asia reinsurance, Jayne Plunkett, at the reinsurance industry’s annual meeting in Monte Carlo.

Swiss Re logoWhile governments are often the catalyst for ambitious growth of insurance markets, it’s up to the industry to discover how to best use new platforms and technology to deliver the protection of emerging economies sought out by the governments.

Plunkett, said; “For me it’s just trying about trying to deploy the best technology, and the best technology can often be a very simple technology.

“When we talk about all these lives being connected, they’re not connected through iphones like the rest of us, it’s normally a very simple device, so I think the insurance industry is doing a very good job of thinking about how to deliver these products.”

Community-based cost sharing, where insurers partner with community organisations such as mutuals and cooperatives to share the expense of providing policies have been pivotal in helping to close the protection gap.

Tremor - The modern way to place reinsurance

Community-based health insurance programmes have helped to grow market penetration into areas normally cut off from the industry; Swiss Re gave the example of this platform’s success in Rwanda, where 84% of the defined population had enrolled by April 2017.

Initiatives such as these, coupled with the benefits in cost-reduction, speed and efficiency that blockchain and other technologies provide could help to unlock the potential of the world’s fastest growing economies.

“For me it’s just trying about trying to deploy the best technology, and the best technology can often be a very simple technology, because when we talk about all these lives being connected, they’re not connected through iphones like the rest of us, it’s normally a very simple device, so I think the insurance industry is doing a very good job of thinking about how to deliver these products, ” Plunkett commented.

Chief Economist, Karl, added; “There’s been an explosion in certain types of technology and that’s gotten everybody quite frenetic.”

“We’re a little slower than the banking industry, but I think that you see successes in Africa with the mobile, which is really quite extraordinary.”

However, it’s the support of governments and their recognition of how vital insurance is to protecting steps of growth and development, that appears to be causing the fastest market growth in emerging economies.

Karl said; “China has done so well, you see the life insurance coming up from nothing to 70%, and you see also the compound growth rates in the previous decade, 40% for agriculture, this has been a big push for governments. Governments have been key for getting markets off the ground. This is a very agressive push, a five year plan with 20% growth in premium volume each year.

“What they do on a technical level is support commerce with trade credit, support exports.

“Insurance goes hand in hand with growth of economy, there’s a causal issue; the growth of the economy drives the insurance, insurance protects the growth. Certainly they go hand in hand.”

Life insurance in emerging markets has been quoted by re/insurance analysts as the biggest future opportunity, Karl commented that “insurance develops along with per capita income, when you do statistical analysis that’s the biggest driver of insurance. It takes off very quickly where there’s a growing middle class,” therefore any efforts or technique to grow into this market, could give re/insurance players a head start into the market of the future.

Print Friendly, PDF & Email

Recent Reinsurance News