Indonesia is beginning to attract more interest from global insurers, while Myanmar should also be high on the list of potential markets, according to law firm Clyde & Co.

With premiums rising 11% annually – five times the growth rate of Europe or the US – Indonesia is a “stand-out market” in a promising region, the firm’s report says.

“Life products reported a 37% annual rise in early 2012, and one major European insurer recently reported a 100% annual growth rate in premiums.”

Although the growth comes from a low base, penetration rates are only about 5% and remain “impressive”.

A number of overseas insurers have entered Indonesia recently, and the Government has tightened its regulations: new rules include a 250% increase in capital requirements.

“With many small companies unlikely to be able to fulfil this, there could be a further flurry of merger and acquisition activity,” Clyde & Co says.

“This will be helped by the fact that the foreign ownership limit in Indonesia is 80%, much higher than many other markets in the region.”

Myanmar – Asia’s “final frontier” – is likely to offer reinsurance opportunities for foreign carriers in the short to medium term, according to the report.

The Government plans to nurture the domestic holders of 12 insurance licences for one to two years before foreign entrants are allowed.

“The new licence-holders are deemed to be too inexperienced in insurance-related matters to be permitted immediate access to the private reinsurance market.

“So it is expected that the Ministry of Finance will consider plans to establish a stand-alone state-owned reinsurer to provide capacity.”

It is likely domestic insurers will be required to take 30% of their reinsurance with this state body, leaving them free to place the rest with foreign groups. This offers “a critical – and unique – entry point into a market with huge potential”, the report says.

The Latin American market is also expected to grow as governments and corporations insure multibillion-dollar infrastructure projects, especially in Mexico, which is worth more than $US20 billion ($21.55 billion) in premium, second only to Brazil in the region.