Mutual and cooperative insurers in developing nations have gained market share since 2007

Wednesday, 03 April 2013

The latest figures from the Global Mutual Market Share 2011 report, ICMIF’s annual research report into the size of the global mutual and cooperative insurance sector, show that mutual and cooperative insurers in developing nations* have gained market share since 2007.

The report is due for release soon and will highlight a sizeable growth in the global market share of the mutual and cooperative sector since the onset of the global financial crisis in 2007/08, increasing from 23.6% to 26.7% in 2011. In the period between 2007 and 2011, premium income for mutual/cooperative insurers (referred to in the report as “mutual”) grew by 26.0%, as the total market increased by 11.2%.

In the developing world, the market share of mutuals increased by over a quarter during the same period, growing from 2.9% to 3.7% in 2011. Much like the trend in developed insurance markets, the penetration of mutual insurance in developing nations is higher in non-life business compared to the life business, with non-life mutual market share calculated at 7.5% in 2011 (a significant increase from 5.9% in 2007). In the life sector, mutual premiums made up just 1.1% of the life business in developing nations, with little change in market share since 2007 (1.0%).

In Latin America, the largest developing region for insurance, mutual premium income increased by almost a quarter in 2011 (double the growth rate in the previous year of 11.3%), with average annual growth of 28% since 2007, nearly 9 percentage points ahead of the total insurance market. As a result, the regional market share of mutuals grew from 8.7% in 2007 to 10.4% in 2011. Six of the ten largest insurance markets in terms of mutual market share in developing nations were from Latin America, including the two largest (Paraguay and Argentina).

For developing markets in Asia, mutual market share increased to 1.3% in 2011 (up from 1.2%) in 2010, as premium growth for the region weakened as a result of increased regulations impacting the Chinese and Indian life sectors. However, there was double-digit increases in mutual market share in both countries (although mutuals only held a market share of less than 1% in both markets), with strong growth of mutuals in markets dominated by Takaful business (Sri Lanka, +18.5%; Malaysia, +7.0%).

The small penetration of mutual business in African markets continued to grow in 2011, with the mutual share reaching 1.9% (up from 1.1% in 2007). Market share growth in Kenya (+31.0%) and Nigeria (+22.8%) were among the fastest-growing mutual sectors in the world in 2011 (although from a low base). The North African markets of Tunisia (22.2%) and Algeria (11.0%) were the only two countries where mutuals held a market share above 10% in 2011.

The 2011 editions of the ICMIF Global Mutual Market Share and the Global 500 reports will be sent to members soon and will also be available to download from the ICMIF website at that time.

* Includes the mutual markets in Latin America, Africa and Asia (excluding Japan, Republic of Korea, Taiwan, Singapore, United Arab Emirates and Saudi Arabia)