Emerging markets with their huge potential are set to change the landscape of the insurance sector in the coming years. Life and non-life insurance premiums in emerging markets have grown annually with impressive growth rates of 10.4% and 7.3% in real terms respectively, compared to the average of 3.4% and 2.6% for advanced countries. Premium growth is also expected to sustain an impressive rate of 7.5% per annum in the coming decade. This is due to strong economic growth, increased stability, good regulatory mechanisms, adaptation of international best practices, innovative product offerings and new distribution channels in emerging markets by insurers. However, insurance business varies greatly in size and structure among the emerging markets.

Emerging markets have shown tremendous growth in the past decade. With improving economic fundamentals and rising household wealth, it is becoming apparent that emerging markets will remain the frontier insurance markets of the 21st Century. Economic growth of the emerging markets has outpaced that of the developed countries. Along with the rising importance of the emerging market economies, their insurance sector is also drawing attention.

According to the latest study from Swiss Re's sigma series, non-life premiums collected in emerging markets are expected to double from $123 bn in 2003 to around $250 bn by 2014, at a constant price. Emerging markets with their huge potential are set to change the landscape of the insurance sector in the coming years. Life and non-life insurance premiums in emerging markets have grown annually with impressive growth rates of 10.4% and 7.3% in real terms respectively, compared to the average of 3.4% and 2.6% for advanced countries. Premium growth is also expected to sustain an impressive rate of 7.5% per year in the coming decade. This is due to strong economic growth, increased stability, and adaptation of international best practices, good regulatory mechanisms, innovative product offerings and new distribution channels in emerging markets by insurers. However, insurance business varies greatly in size and structure among the different emerging markets.

There is a widespread apprehension of market saturation in developed economies, and reform processes initiated in emerging markets continue to keep the latter in the limelight. However, to maintain these growth rates and to realize the full potential, emerging markets have to address certain issues such as overhauling regulatory systems, promoting market competition and enhancing public confidence in, and awareness of, insurance products. Providing tax-benefits and enforcement of mandatory insurance in specific sectors will also boost the insurance sector in these markets. In the following sections, an attempt has been made to track the growth and development of the insurance sector in the emerging markets.

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