Far from home

INDONESIA

• Indonesia's life insurance sector is stable, underpinned by a developing domestic market, sustainable growth in premiums and strengthening regulatory requirements.
• Income from premiums should grow steadily in 2013, fuelled by Indonesia's rising affluence, its heavily under-penetrated market, and increasing catastrophe awareness.
• Penetration of the life insurance market remains low at 1.7 percent, compared with 8.1 percent for the U.S, 11.8 percent for the U.K. and greater than 4 percent for neighboring markets such as Singapore and Malaysia. In the first half of 2012, the Indonesian insurance sector grew 15.5 percent.
• Enhanced regulatory requirements, including increased minimum capital requirement to $7.3 million by 2012 and $10.3 million by 2014, should encourage tighter market consolidation.
• The number of insurers should shrink as smaller and weaker insurers merge with other companies to meet the new capital requirement or be forced to exit the market. Over the long term, the M&A activity should help insurers develop greater risk awareness and improve their ability to manage capital sources.
• Foreign ownership in the under-penetrated domestic market is also expected to increase as growth slows in mature markets such as in the Americas, Japan and Korea. This is further encouraged by Indonesia's foreign ownership limit, which at 80 percent is much higher than in other Asian countries.

INDIA 

• India is expected to emerge as the third-largest market for life insurance in the world by 2015, only after China and Japan. At present, India stands 12th among the top markets for life insurance. 
• Life insurance sales in India are expected to reach $111.9 billion in 2015, up from $66.5 billion in 2011, yielding a compounded annual growth rate of 14.1 percent. The number of policies sold is expected to increase to 85.2 million in 2015 from 53.2 million in 2010.
• Factors fueling the market's growth include a proposal by India's Insurance Regulatory and Development Authority to increase the limit on foreign direct investment to 49 percent from 26 percent, plus improved efficiency of distribution channels in the nation's small cities.
• The individual life insurance segment, which comprised 74.8 percent of the total Indian life insurance industry in 2010, is expected to grow to 79.3 percent in 2015, driven mainly by increased investment in individual life insurance products such as term and pension plans.
• Unit-linked insurance plans, which offer both life insurance coverage and savings/investment options, are expected to be the fastest growing product category, yielding a CAGR of 21.2 percent in 2015.
• Life Insurance Corporation of India, a state-owned company, remains by far the largest player in the market. Private companies are focused largely on ULIPs because of this market segment's potential.

RUSSIA

• Life insurance sales account for just 2.3 percent of the total insurance market in 2010. Sales are expected to attain $3.3 billion by 2015.
• Factors depressing the market's growth include the absence of tax benefits on life insurance products, an inert private pension system and a perception among Russians that life insurance is not a vehicle suitable for building a retirement nest egg.
• Individual life insurance sales accounted for nearly two-thirds (66 percent) of the life insurance market in 2010, whereas group life insurance sales nabbed 14.5 percent of market share.
• An increase in carriers' minimum authorized capital requirements is expected to lead to consolidation in the Russian life insurance market.
• Following Russia's entry into the World Trade Organization, an increase in foreign direct investment limits is also anticipated, which would give a much-needed boost to life insurance sales.

  BRAZIL
 

• Brazil is the world's 17th largest insurance market and the largest in Latin America.
• The insurance industry in the country has expanded significantly over the last decade, driven by a growing economy, rising consumer awareness of insurance products, a partial relaxation of regulatory restrictions, and liberalization of the industry to allow foreign competition.
• Brazil remains nonetheless a largely untapped market for life insurers, with 70 percent of the employed population being uninsured. 
• Brazil's life insurance market is concentrated and contains a few companies with very large market shares.
• Pegged at $35 billion in 2011, life insurance sales are expected to rise by more than 12 percent per year, attaining $56.4 billion in 2015, representing a compounded annual growth rate of 12.3 percent.

CHINA
 

• China is the world's sixth-largest life insurance market and the largest life insurance market in the region. By 2020, the Chinese insurance industry is expected to become larger than Japan's, making it the second largest insurance market in the world, trailing only that of the U.S.
• Contributing to the market's expansion between 2006 and 2010 was the country's aging population, robust economic growth, rising disposable incomes of China's middle-class, and an increasing awareness of the need for insurance.
• Despite the insurance industry expansion, China remains an untapped market  with only 50 percent of the population insured by 2010.
• A market penetration of just 2.6 percent of GDP highlights the opportunities within the country for life insurance companies between 2011 and 2015.
• In 2010, the individual life insurance segment accounted for 94.3 percent of the total Chinese life insurance industry. Income from premiums in 2011 (the last year for which statistics are available) grew by 7 percent premium since 2010. 
• Distribution channels such as bancassurance have gained significant market share.

JAPAN
 

• New business fromindividual life insurance sales among 43 companies in Japan reached $404.1 billion between April and September, 2012.
• New business from individual annuities, group life insurance and group annuities over the same period totaled $43.1 billion, $17.9 billion and $215.8 million, respectively.
• Premium income generated from all products between April and September 2012 totaled $223 billion, representing a 103.7 percent gain over the same period in 2011.
• New business has been on the rise since fiscal 2007 due to strong sales of health insurance and whole life insurance. Including sales of whole life insurance by banks, the amount of new business in fiscal 2010 (the most recent year for which results are available) increased from the previous year.
• As of fiscal 2010, sickness/hospitalization insurance garnered the most market share (26.4 percent) in the life and health space, followed by whole life insurance (23.8 percent), endowment insurance (13.8 percent), cancer insurance (10.6 percent) and term insurance (9.3 percent). 

For a first-hand account of the life insurance market in Japan, see:

Q&A: Hiroshi Sasamoto of Japan