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

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.