Insurance in Emerging Markets: cases from South Africa

These economies are often characterized as intermediate income (i.e. neither low-income nor high-income), exhibiting relatively higher market volatility and within the process of developing infrastructure. Example countries include China, India, Russia, Brazil, Turkey and Mexico – among others. The insurance market in these countries have also exhibited an average growth of approximately 4% since 2021, whereby China alone exhibited a total premium volume of 698 billion USD in 20221.

Insurers play an instrumental part in driving economies within emerging markets by mitigating risks, promoting stability and encouraging financial inclusion. Through their assessment of specific needs of individuals in these markets, insurers have a unique opportunity to innovate and incentivize ‘good’ behavior. Traditional insurance products may not always be suitable in emerging markets due to the cultural and socio-economic context. While purchase triggers for insurance in mature markets often revolve around financial management, in emerging markets, individuals typically purchase insurance out of fear of illness or income protection. This drives insurers to develop innovative products that are tailored to the (somewhat more significant) local needs of the population. Moreover, in markets where governments provide limited support, whether it be for healthcare or loss of income due to illness, for example, insurers play a vital role in filling the gap. Therefore, emerging markets provide abundant and diverse opportunities for insurers.

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