Monte Carlo Digital Forum: The promise of emerging markets

As the global economy begins to look towards strategies for recovery, underwriters are increasingly looking to the emerging economies for growth opportunities.

The economic predictions support the view that emerging markets will continue to see levels of growth and investment that will outstrip their established peers.

(Click here to view a innovative solutions session from our sponsor, AdvantageGo)

In terms of the industry itself, the Swiss Re Institute estimates total premium volumes in advanced markets (life and non-life) will shrink 4% this year and return to positive growth of more than 2% in 2021. This compares with estimates for the emerging markets, where premium growth is expected to remain in positive territory in both years, up 1% in 2020 and 7% in 2021.

These economies are set to be supported by a concerted investment in infrastructure development that will drive sustainable growth following the Covid-19 pandemic.

Emerging markets will invest $2.2trn in infrastructure annually over the next 20 years, equal to 3.9% of GDP. The energy sector – in particular renewable energy – smart and resilient infrastructure and healthcare facilities are expected to attract strong investment.

Emerging market infrastructure is set to represent an annual investment opportunity of $920bn for long-term investors, including insurers. The construction and operational phases of infrastructure projects will also generate new demand for insurance solutions, with engineering, property and energy lines of business set to benefit most.

Beyond the recession shock inflicted by the Covid-19 pandemic, emerging markets are forecast to grow around 4.4% annually over the next decade, slower than the yearly average of 5.5% in the period 2010 to 2019, but much faster than the projected 1.8% growth in advanced markets.

Economic headwinds

In the aftermath of the pandemic, the global economy will face headwinds from impaired supply chains and production capacities, higher unemployment, bankruptcies and higher debt burdens.

Against this backdrop, emerging markets will be required to become more resilient by improving productivity and increasing investment in infrastructure, which in turn can reduce businesses’ operating costs and create an enabling environment for new capital formation and output growth.

There is a clear potential for the re/insurance industry to benefit from the opportunities to support the ambitious infrastructure and growth within these economies. However, turning potential into premium income will require clear strategies as to how best to access the markets and shape the policies that meet the rising demands and exposures.

In this innovative solutions session, AdvantageGo explores the conditions affecting the reinsurance industry today and why the principle of treaty portfolio diversification is more important than ever.

Our innovative solutions session will examine the issues with a particular focus on:

• The big opportunities for reinsurers;

• The blockers to accessing these opportunities; and

• The technology enabling reinsurers to emerge in a stronger position.

The session also covers some of the constraints reinsurers face when working with large data sets and difficulties when analysing their portfolios.

Don ot miss out on this opportunity to understand how the right technology capabilities can be used to gain a larger slice of that emerging market pie without unduly risking existing portfolio performance. Click here to register your interest.