Emerging economies are expected to grow at 2-3 times the pace of developed markets over the next five years, providing a huge opportunity for (re)insurers, according to JLT Re.

A new report from the reinsurance broker predicts 4% growth in emerging markets this year, representing the first acceleration since 2010.

It tips China, India, Kenya, South Africa, Thailand, Mexico and Brazil will all undergo significant non-life premium growth through to 2021, as insurance penetration and density levels rise.

The first three nations are standouts, with GDP expected to grow at 3-4 times the rate of developed countries over the next five years.

JLT Re Global Head of Analytics David Flandro says this means “significant opportunities for risk transfer”, with (re)insurers’ prospects in emerging markets closely tied to economic growth.

Asia-Pacific CEO Stuart Beatty says this “new world order” presents a huge opportunity.

“The catch-up potential associated with insurance penetration and density rates in emerging markets reinforces our view that these countries will be crucial in driving long-term insurance sector growth as carriers seek new and profitable revenue streams,” he said.

“Positive fundamentals such as expanding middle classes in urban areas, increased asset ownership, infrastructure investments and industrialisation will drive this expansion.”

He says a thoughtful approach is needed when entering new territories, and new risks must be managed.