Kathmandu. Insurance remains one of the least developed areas of financial inclusion in emerging economies, even as digital payments and savings products continue to grow.
This is according to a recent study by the Geneva Association. “In particular, there are large security gaps in health, disability, savings-type life and property insurance,” the report said.
Medical costs are the biggest financial concern in almost all the markets surveyed. That reflects limited Social Security and high external spending.
Awareness about insurance is highest in China, India and South Africa. It is driven by established cultural practices such as digital platforms, government events, and funeral policies. “China and India also lead the way in the use of insurance,” the report said, adding that nearly three-quarters of respondents own at least one policy. ’
Credit is the least used financial service in all countries, mainly due to a lack of trust in lenders and a lack of credit history, the report said. “Cost is a major barrier to health and life insurance,” the report said, adding that a lack of information reduces demand for saving-type life products. ’
Many of the families surveyed said that insurance was not a priority and did not fully understand the need for insurance. Studies have shown that inclusive insurance can help families withstand shocks (such as illness, accident, or natural disaster) without being in poverty. It also supports business activity by reducing financial risk.
The Geneva Association has pointed out that 3 areas of business innovation, public policy and regulation must work together to close the security gap. It has highlighted simple products, digital distribution, affinity sharing and parametric insurance as key business solutions. It has also identified government grants, digital identity systems, and insurance education as essential policy tools.
The association recommends encouraging regulators to enable innovation through simplified licensing, digital onboarding rules and sandbox frameworks while maintaining consumer protection. According to the report, emerging economies have an opportunity to rapidly expand insurance coverage, combining digital tools, public-private partnerships, and supportive regulations.
The report covers 7 markets: Brazil, China, India, Mexico, Morocco, South Africa, and Turkey. This shows that more than 1.3 billion adults worldwide still do not have access to formal financial services.
