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Transcript
DEVELOPING THE MENA INSURANCE SECTOR –
ECONOMETRIC AND ANECDOTAL INDICATORS
RODNEY LESTER
WORLD BANK CONSULTANT
MENA is the smallest consumer of
insurance?
5
4.5
4
3.5
3
2.5
Life Pen. %
2
1.5
1
0.5
0
Source: AXCO
P&C Pen. %
Health Pen. %
Stylized penetration % v. GDP/capita
4
3.5
3
2.5
Life Curve
2
P&C Curve
1.5
1
0.5
0
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
Core economic and structural drivers of
penetration – country effects proxies
P&C
Life
GDP/
Capita
GDP/
Capita
Population
(trade
proxy)
Inflation
Population
Inflation
Population
Density
P&C Penetration v. GDP/ Capita
and Actual v. Expected after economic
and structural factors
Life Penetration v. GDP/ Capita
and Actual v. Expected after economic
and structural factors
Other highly predictive drivers of
penetration
Life
P&C
Concentration
Private
credit
Private
credit
Sharia role
Private
insurer
SOM
Legal
rights
Car fleet
Private
insurer SOM
Sharia role
Bond Market
Legal rights
Top 20%
income share
Old age
dependency
The scale/ competition trade off
leads to natural concentrations
levels
Source: Thorburn, ‘Insurers: Too Many, Too Few or Just right”
Motor premiums in MENA are less than they
should be
Things that can be changed
relatively quickly
Issue
Response
MTPL
Tie to annual car registration, set up central claims database, keep
politicians out of pricing, use nominal defendant
Efficient
industry
structure
Set minimum capital, minimum premium retentions, minimum
market shares for mandatory lines, privatize government insurers,
ensure exit of insolvent insurers
Mandatory
insurances
Add mandatory coverages that have social benefit – WCA,
general liability, PI, health etc
Sharia law
Focus on developing family Takaful
Private credit
development
Encourage mortgage and personal loan market development
Bond markets
Encourage development of bond markets and yield curve
standard
Consumer
protection
Institute basic consumer protection regime – transparency,
recourse, education.
MENA’s low insurance penetration
represents an enormous opportunity