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.
Insurance confusion should see Toronto reject UberX
As councillors in Toronto prepare to vote on new regulations for rideshare firms, the group representing the city’s taxi drivers says the council should reject UberX due to the lack of clarity in its insurance arrangements.
The Toronto Taxi Alliance is calling for the rejection of the rideshare firm, despite UberX claiming that it has $5 million liability coverage to supplement its drivers’ personal coverage. Insurers have said that the coverage offered by the company does not cover all incidents or damage to drivers’ vehicles.
“This issue is too important to public safety in Toronto to allow such misinformation to be distributed,” says Gail Souter, President of the Toronto Taxi Alliance (TTA). “Uber has not been upfront about its insurance coverage to Toronto Councillors and residents. Toronto needs to reject UberX.”
Insurance scores well for customer service
The insurance industry is one of the best performing sectors for customer service.
A new survey carried out across Europe found that satisfaction in customer service scored 74.3 per cent for insurance companies; behind top-rated food retailers on 75.6 per cent but ahead of banking (72.7 per cent), transport (71 per cent) and utilities (68.9 per cent).
The survey, by the Institute of Customer Service, found a link between a country’s economic performance and levels of customer satisfaction.
ICS chief executive Jo Causon noted: “Good customer service should not be seen as a ‘nice to have’ for organizations, but as a key competence and asset which can bring wider economic benefits – particularly when it comes to enhancing productivity, competitiveness, job creation and prosperity within organizations and across countries as a whole.”