NU Online News Service, Dec. 20, 12:59 p.m.EST

Premium growth in emerging markets has expanded by 11 percentover the past decade, driven by a strong economic environment,insurance supervision and regulations and product innovation,according to a study by Swiss Re.

The sigma study, “Insurance in Emerging Markets: Growth Driversand Profitability,” notes the growth, between 2001 and 2010 iscompared to growth of 1.3 percent in industrialized economiesduring that time.

Insurance premiums in emerging markets amounted to $650 billionin 2010, Swiss re says.

Emerging markets, the study finds, have increased their share inthe gross domestic product from 21 percent to 34 percent,accounting for two-thirds of global economic growth in 2010.

During the global financial crisis beginning in 2008, emergingmarkets maintained healthy growth, while a number of industrializedcountries fell into deep recessions, the study finds.

This growth also has meant growth for the insurance industry.According to the study, non-life emerging-market premiums rose 9.3percent faster than industrialized markets, which saw growth of 2.3percent.

The top-two growth areas were Emerging Asia, which saw totalpremium growth by 18 percent on average, from $51 billion in 2001to $336 billion in 2010; and Latin America, whose premiums jumpedfrom $45 billion in 2001 to $128 billion in 2010, according to thereport.

Swiss Re explains that emerging markets, especially China andIndia, have moved from agriculture-based to more industry andservice-based economies. Manufacturing facilities have beenexpanded and developed and the export sector has been developed.This together with infrastructure investments and increased globaltrade has meant jobs and rising growth in gross domesticproduct.

When global demand for exports weakened, according to the study,countries elevated domestic consumption. China, for exampleincreased government spending on healthcare and education.

Latin America's growth has been slower, the report says. Itseconomies are still dependent on commodity exports. In Brazil,however, domestic demand is strong.

In Latin America, a vibrant economy has strengthened domesticdemand, fueling purchases of homes and automobiles, Swiss Refinds.

The study notes that improved insurance regulations andsupervision have led to lower pricing and more productcontrols.

Also of note, long-established domestic monopolies that barredforeign entry into Latin American markets have been abolished,encouraging competition, according to the report.