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Successful Business Strategies for Insurers Entering and Growing in Emerging Markets

Author

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  • Thomas R Berry-Stölzle

    (Terry College of Business, University of Georgia, 206 Brooks Hall, Athens, GA, 30602, US. E-mails: trbs@terry.uga.edu; rhoyt@terry.uga.edu)

  • Robert E Hoyt

    (Terry College of Business, University of Georgia, 206 Brooks Hall, Athens, GA, 30602, US. E-mails: trbs@terry.uga.edu; rhoyt@terry.uga.edu)

  • Sabine Wende

    (Department of Risk Management and Insurance, University of Cologne, Albertus-Magnus-Platz, 50923 Cologne, Germany.)

Abstract

Entering new markets and growing in existing ones is an area of major interest within the insurance industry across the globe. Insurance market growth rates in emerging markets are far in excess of those available in most developed countries. While these growth rates have attracted new and existing firms to these markets, corporate managers face a number of important strategic decisions as they consider establishing or expanding operations in emerging markets. This study evaluates the impact of several strategies on insurer performance in emerging markets. The main findings suggest that overall, successful business strategies for insurers entering or growing in emerging markets involve a high growth rate, increased size and more emphasis on life insurance. When performance is adjusted for risk, lower financial leverage and mutual organisational form are associated with better performance. However, differences in successful business strategies arise across countries when we control for country-level economic and market characteristics.

Suggested Citation

  • Thomas R Berry-Stölzle & Robert E Hoyt & Sabine Wende, 2010. "Successful Business Strategies for Insurers Entering and Growing in Emerging Markets," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 35(1), pages 110-129, January.
    • Handle: RePEc:pal:gpprii:v:35:y:2010:i:1:p:110-129
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    Citations

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    Cited by:

    1. Walid Bahloul & Abdelfettah Bouri, 2016. "The Efficiency of the European Non-Life Insurance: CEO Power, Macroeconomic, and Market Characteristics Impact," IJFS, MDPI, vol. 4(1), pages 1-13, March.
    2. Lee, Chien-Chiang & Chiu, Yi-Bin, 2016. "Globalization and insurance activity: Evidence on the industrial and emerging countries," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 328-349.
    3. Eling, Martin & Jia, Ruo & Schaper, Philipp, 2017. "Get the Balance Right: A Simultaneous Equation Model to Analyze Growth, Profitability, and Safety," Working Papers on Finance 1716, University of St. Gallen, School of Finance.
    4. Stephen G. Fier & Andre P. Liebenberg & Ivonne A. Liebenberg, 2017. "Insurer Growth Strategies," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 20(3), pages 309-337, December.
    5. Rafael Hernandez Barros & Javier Vidal-Garcia & Marta Vidal & María Isabel Martínez Torre-Enciso, 2016. "New Evidence in the Definition of Strategy for Global Insurers," Economics Bulletin, AccessEcon, vol. 36(3), pages 1829-1843.
    6. Biener, Christian & Eling, Martin & Wirfs, Jan Hendrik, 2016. "The determinants of efficiency and productivity in the Swiss insurance industry," European Journal of Operational Research, Elsevier, vol. 248(2), pages 703-714.
    7. Biener, Christian & Eling, Martin & Schmit, Joan T., 2014. "Regulation in Microinsurance Markets: Principles, Practice, and Directions for Future Development," World Development, Elsevier, vol. 58(C), pages 21-40.
    8. Muhammed Altuntas & Gerrit Gößmann, 2016. "The Relationship Between Home Market Performance and Internationalization Decisions: Evidence From German Insurance Groups," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 19(1), pages 37-71, March.
    9. Martin Eling & Ruo Jia & Philipp Schaper, 2022. "The magic triangle: growth, profitability and safety in the insurance industry," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(2), pages 321-348, April.
    10. Thomas R. Berry-Stölzle & Robert E. Hoyt & Sabine Wende, 2013. "Capital Market Development, Competition, Property Rights, and the Value of Insurer Product-Line Diversification: A Cross-Country Analysis," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 80(2), pages 423-459, June.
    11. Qiao-Ming Lim & Hui-Shan Lee & Wai-Mun Har, 2021. "Efficiency, productivity and competitiveness of the Malaysian insurance sector: an analysis of risk-based capital regulation," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(1), pages 146-172, January.
    12. Qiao-Ming Lim & Hui-Shan Lee & Wai-Mun Har, 0. "Efficiency, productivity and competitiveness of the Malaysian insurance sector: an analysis of risk-based capital regulation," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 0, pages 1-27.

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