About the Microinsurance Market
Microinsurance products are coverage policies targeted at households with low-income levels. These plans provide tailored insurance policies for individuals with little or small saving plans. They offer lower value assets and compensation for injury, illness, or death to a person compared to other insurance policies. Microinsurance companies assist the not so well off by offering insurance plans that are tailored to their specific needs. The coverage value of the policy is lower than a typical insurance plan. Therefore, the insured customer pays considerably smaller premiums to the insurance company. The presence of the microinsurance market is strong in developing countries with high growing opportunities.
Technavio’s analysts forecast the global microinsurance market to grow at a CAGR of 8.2% during the period 2016-2020.
Covered in this report
The report covers the present scenario and the growth prospects of the global microinsurance market for 2016-2020. To calculate the market size, we consider the total amount of microinsurance from the Americas, APAC, and EMEA.
The market is divided into the following segments based on geography:
Technavio Announces the Publication of its Research Report – Global Microinsurance Market 2016-2020
Technavio recognizes the following companies as the key players in the global microinsurance market: Alternative Insurance Company, Bajaj Allianz, IFFCO Tokio General Insurance, Mapfre, and Pioneer Life.
Other Prominent Vendors in the market are: HDFC Ergo, Hollard Insurance, MicroEnsure, NSIA Insurance, PNB MetLife, Protecta, and Tata AIA Life.
Commenting on the report, an analyst from Technavio’s team said: “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.
Alternative Insurance Company, Bajaj Allianz, IFFCO Tokio General Insurance, Mapfre, Pioneer Life, HDFC Ergo, Hollard Insurance, MicroEnsure, NSIA Insurance, PNB MetLife, Protecta, Tata AIA Life.
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