Dublin – Research and Markets has announced the addition of the “Global Micro Insurance Market 2016-2020” report to their offering.
The global microinsurance market to grow at a CAGR of 8.2% during the period 2016-2020.
Global Microinsurance Market 2016-2020, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.
One trend which is exerting a positive influence on the market is the mandatory need for microinsurance. Mandatory coverage, often required in connection with a loan, is widespread in microinsurance, particularly among life and accident products. Some microinsurance products combine both mandatory and voluntary coverage policies, for example by requiring customers to purchase a base level of coverage with the option to add on either more coverage or more covered persons. Countries such as Brazil, India, Mexico, Peru, the Philippines, and Taiwan have already implemented some levels of regulation, both to support the adoption of microinsurance and to protect customers.
According to the report, a key growth driver is the different valuation strategies used by insurance companies. The microinsurance industry is considered a cyclical industry. Therefore, microinsurers formulate different strategies to earn positive yields and generate cash flows. Such strategies should bring in stable earnings year-on-year for players in the microinsurance industry.
The microinsurance companies are affected by the insurance industry’s cyclicality, but the growth resulting from the changes in premiums may not influence the relative growth prospects of microinsurance companies. However, it is important to consider the fact that a microinsurance company’s underwriting activities do have an effect on the valuation of the insurer. This applies to instances when there is a growth in the rate of the premium.
Further, the report states that one challenge that could hamper market growth is the difficulty in credit assessment of the insured. It is critical for a microinsurance company to assess the creditworthiness of the insured before availing insurance services to minimize risks of default on repayments of premium.