Insurance
From The Report: Mongolia 2012
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The insurance sector, like that of many emerging markets, is small, undersubscribed, poorly staffed and confusingly regulated. However, Mongolia’s growth story has driven annual premium growth of around 20%, and new initiatives should help the industry grow further. Motor insurance, for example, became mandatory on January 1, 2012. Eight firms dominate the sector, with legacy provider Mongolia Daatgal commanding a 30% share, and foreign-owned companies beginning to appear on the scene. One unique product being offered now is livestock insurance, which seeks to mitigate the losses frequently suffered by rural farmers during intensely cold winters, or dzuds.
This chapter features an interview with S. Ganbold, Insurance Market Department Director, Financial Regulatory Committee (FRC).

Articles from this Chapter

Overview

Plenty of potential: Overcoming obstacles is expected to better prepare the sector
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The insurance sector is young but growing rapidly and is characterised by a relatively inexperienced labour pool, incomplete regulations, big plans for regulatory reform and fast growth from a small base. In short, it looks like a typical early-stage insurance sector in any developing country. The sector needs “technical assistance and labour training, new technologies, actuary training and better marketing strategies,” Sergey Gromov, the chairman of Mongol Daatgaal, told OBG. Over time,…

Interview

OBG talks to S. Ganbold, Insurance Market Department Director, Financial Regulatory Committee (FRC)
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Interview:S. Ganbold To what extent has a general lack of awareness of insurance inhibited the development of the non-compulsory market segment? GANBOLD: Insurance in Mongolia started almost 80 years ago, in 1937, but during the socialist era it was operated completely under central planning. The real insurance market started in the last two decades. In the early 1990s Mongolia was transformed from a centrally planned to a market-driven economy, and the former insurance authority was reorganised…

Analysis

One of a kind: A new livestock insurance initiative helps herders recover losses
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Perhaps the most innovative component of Mongolia’s insurance sector is a recently launched livestock management policy. The Index-based Livestock Insurance Project (IBLIP), which is specifically tailored to the country’s unique needs and extreme environment, is among the first of its kind to be put into practice. Under IBLIP, indexed insurance is used to cover livestock instead of applications like agricultural yields or weather risks. A successful pilot version of the livestock insurance…

Analysis

On the docket: A number of upcoming changes are expected to spur expansion
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While modifying regulations involving insurance have not yet achieved prominence in Mongolia’s current parliamentary calendar, once they do rise to the top of the agenda key issues to be debated include mandating motor and professional liability insurance; allowing firms more control over how they deploy their investment account; and increasing the minimum capital requirement, currently MNT1bn ($780,000). DRIVE CAREFULLY: As of late-2011 there were an estimated 300,000 vehicles in the country,…