Insurance
From The Report: Mongolia 2014
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Mongolia’s insurance industry is expected to grow rapidly over the next few years as the economy expands and more firms and individuals become familiar with insurance products and the need to be covered. The market is open – a rarity in Asia – and international investors and strategic partners are taking a close look at potential acquisition targets and partners. With the state controlling the insurance sector until 2003, and the population largely rural, many individuals remain unaware of what insurance is and now it works. However, this is changing, and the arrival of multinational firms has resulted in a rising awareness of insurance products. The prospects for the sector are excellent. If consolidation takes place and if insurance awareness increases as expected, margins will be solid and growth almost certain.

Articles from this Chapter

Overview

Growth assured: Increasing awareness and expansion likely to continue
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One of the most promising segments in Mongolia’s financial services industry is insurance. It is seen growing rapidly over the next few years as the economy expands, as the market becomes more sophisticated, and as more firms and individuals become familiar with the products and begin buying them. Insurance companies will benefit both from increasing prosperity and increasing awareness of the need for cover. The insurance market is also open – a rarity in Asia. International investors and strategic…

Analysis

Good foundations: The development of the nation’s social security system
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The social security system in Mongolia is surprisingly well developed. While health care benefits are low, the country offers a good range of support to almost all its citizens. Payouts for retirement are quite substantial. Still, improvements certainly are required, such as increased medical benefits and better funding of the programme. But a good foundation has been established, one off of which a modern social security system can be built. The Constitution of 1940 guaranteed the right to retirement…

Analysis

The right mix: Livestock insurance blends commercial enterprise and public policy
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The Mongolian Index-Based Livestock Insurance (IBLI) programme could greatly help the country. Given the harsh climate and the frequent cold winters – and given the fact that herders, which make up a significant part of the population in Mongolia, tend to live with little financial cushion – it is vital that a financial product exist that can act as a hedge when livestock dies. The challenge remains to get the structure right. It must be priced so that herders are compelled to buy it, while at…

Analysis

Small steps: Opportunities exist for the further development of micro-insurance
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Mongolia is an ideal country for micro-insurance. While the urban and the wealthy have access to a wide range of commercial products, and all the people of Mongolia can technically be covered under the country’s social security programme, much of the population is falling through the cracks. The poor and the nomadic, which make up more than half the country, are facing risks that cannot be insured away given the cost of mainstream insurance, the current product range available and the geographic…