China, the United States, and India lead the world in insurance potential, according to a recent study.
Global insurance company MAPFRE analysed and ranked the life and non-life sectors in 96 insurance markets (both developed and emerging) for its latest global insurance potential (GIP) index. MAPFRE conducted the study to measure the insurance protection gap (IPG) worldwide, creating a metric that summarises which markets offer greater insurance potential in the medium- and long-term.
The study revealed that the top five markets with the most insurance potential in the life sector are China, the US, India, Indonesia, and Russia. Meanwhile, the top five markets in the non-life sector are China, India, the United States, Indonesia, and Japan.
Aside from measuring each market’s IPG, the study also took other variables into account, such as penetration, economy size, and population size. In order to be highly placed in the ranking, markets needed to be large in size (as measured by GDP) as well as having adequate capacity to close their own domestic IPG.
The report also stressed the value of countries that have the capacity to close their own domestic gap but have relatively little economic weight – they are therefore placed in a low position in the overall ranking.
In the life segment, the report identified Egypt, Pakistan, Nigeria and the Philippines as contenders for higher positions currently occupied by other emerging markets.
Within the non-life segment, the report identified Pakistan, Egypt, Bangladesh, Nigeria, and the Philippines as countries with considerable potential to reduce their domestic insurance gap.