Forecasting non-life insurance demand in the BRICS economies: a preliminary evaluation of the impacts of income and climate change

Produced as part of the The Munich Re programme: evaluating the economics of climate risks and opportunities in the insurance sector CCCEP research programme theme

Also known as Munich Re Technical Paper: 11


Insurance demand is driven by many factors, but for the emerging economies, one of the most significant historical drivers of growth has been income per capita.

Based on a simple forecasting approach, we project that insurance penetration in the BRICS economies could increase at a rate of between 1.6 and 4.2% per year over the coming decade, depending on the country, due to rising per capita income. When other factors are included, this broadens to between 0.1 and 4.3% per year. This equates to a rate of increase in gross premium volumes of between 5.4 and 12.3% per year.

The largest growth in insurance penetration and premium volumes is expected in China, closely followed by India and Russia. A concern for (re)insurers is how climate change may impact these growth paths.

Based on current projections, we expect the impact on growth mediated through income to be small; less than a 0.4% adjustment in the annual growth rate in premium volumes to 2030.

Nicola Ranger and Andrew Williamson