Developing Insurance Markets : Motivations and Initiatives to Grow the Institutional Investment Role of Emerging Market Insurers
This paper develops a theme identified in recent insurance sector development work: that more developed insurance markets are desirable as insurers play a more effective institutional investment role, whether this objective seeks deeper and more li...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/751081632205407245/Motivations-and-Initiatives-to-Grow-the-Institutional-Investment-Role-of-Emerging-Market-Insurers http://hdl.handle.net/10986/36354 |
| Summary: | This paper develops a theme identified
in recent insurance sector development work: that more
developed insurance markets are desirable as insurers play a
more effective institutional investment role, whether this
objective seeks deeper and more liquid bond or capital
markets, or to see more investment in long term assets such
as infrastructure or in support of climate finance. It
explores the perspective of domestic insurers, summarizing
positions regarding asset selection and key drivers of
current and desired asset structures. The paper draws on
interviews in several deep-dive countries supplemented by
additional engagement for a more representative global
reach. It then discusses a range of solutions that may be
considered by policymakers categorized under efforts to:
grow the sector so it can play a more substantive role;
improve how assets are packaged and made available to
insurance companies so they are more investable; review
risk-based capital rules to ensure that they encourage and
reward the right behavior; and check other regulations do
not present unintended barriers. The paper concludes that,
although domestic insurers are interested in making
investments that meet these goals, they are constrained by
barriers that are almost entirely external to their own
operations and outside their control. With some adjustment
to supply and regulatory settings, insurers should translate
their interest into action, increasing their role and
improving the contribution to this desirable development
outcome. The paper is intended to be particularly relevant
for policymakers and practitioners with less experience
within insurance company operations who are looking to
better understand and respond to insurance decision making. |
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