BestWeek: Microinsurance Part of Strategies in Emerging Markets

Insurers in the world's emerging markets increasingly are inclined to include microinsurance in their long-term strategies, according to a new A.M. Best Special Report, "The Potential of Microinsurance - Market Review," featured in BestWeek U.S./Canada.

Microinsurance has challenges - ranging from adverse selection to lack of profitability - that are enough to discourage inclusion of this business in short-term planning, the report said. However, increasing global interest in high-growth markets necessitates global insurers to understand this business model.

Insurers and reinsurers have a great opportunity to tap the largely uninsured working poor in emerging markets, but need scale and innovation to be profitable, said Andrea Keenan, assistant vice president of economic and industry research at A.M. Best.

In BestWeek Europe, the fast-growing markets in the Middle East, Africa and South and Central Asia are attracting insurance players from across Europe to economies with low insurance penetration and in some countries promising demographics.

A.M. Best Europe is among those with a keen interest in the region, and coinciding with a major insurance conference in Qatar, will launch its new representative office in nearby Dubai, United Arab Emirates, on March 14. The office will be located in the Dubai International Financial Centre.

The new representative office will advance A.M. Best's position in the region, said Nick Charteris-Black, managing director for market development in Europe, Middle East and Africa.

Also in BestWeek U.S./Canada, Prudential Financial Inc. is the latest of several big-name U.S. life insurers to announce it's stopping sales of long-term care insurance to individuals.

Prudential Group Insurance (NYSE: PRU) said it will focus only on group long-term care insurance. The second-biggest U.S. life insurer said it will honor existing individual LTC policies and the terms of these contracts, which are guaranteed renewable, won't change. BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit www.ambest.com/sales/BestWeek. BestWeek can be accessed on iPads and mobile devices. Go to www.bestweek.com on your iPad or mobile device, click on BestWeek digital to log in. Founded in 1899, A.M. Best Co. is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.