THE MARKET POTENTIAL IN MONGOLIAN INSURANCE SECTOR

(1)

THE MARKET POTENTIAL IN

MONGOLIAN INSURANCE SECTOR

BATJARGAL JAMSRAN

Executive director

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CONTENT

• MARKET POTENTIAL IN MONGOLIAN INSURANCE

INDUSTRY

• MAIN OPPORTUNITIES EXPANDING MONGOLIAN

INSURANCE MARKET

2

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THE NUMBER OF LICENSED INSURERS

15 15,5 16 16,5 17 17,5 18 18,5

16

18

17

18

17

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4 MONGOLIAN INSURERS ASSOCIATION

₄

THE NUMBER OF BRANCHES OF INSURERS

0 50 100 150 200 250 300 2008 2009 2010 2011 2012 2013

120

129

138

188

213

251

(5)

TOTAL ASSETS OF THE INSURERS

0

20

40

60

80

100

120

140 2008

2009

2010

2011

2012

2013

34.3

41.1

56.7

81.3

107.6

126.4

(6)

6 MONGOLIAN INSURERS ASSOCIATION

₆

GROSS WRITTEN PREMIUM

/in billion tugriks/

Source: FRC, 2013 Annual report of insurance industry

0 10 20 30 40 50 60 70 80 90 100 2008 2009 2010 2011 2012 2013

21.5

23.4

31.8

47.5

79.0

93.9

(7)

TOTAL COMPENSATION

0 5 10 15 20 25 30 2008 2009 2010 2011 2012 2013

4.5

5.5

6.8

10.0

16.9

26.5

(8)

8 MONGOLIAN INSURERS ASSOCIATION

₈

TOTAL RESERVE FUND

0 10 20 30 40 50 60 70 2008 2009 2010 2011 2012 2013

21.4

24.7

29.1

36.1

48.2

57.3 Source: FRC, 2013 Annual report of insurance industry

(9)

OUTWARD REINSURANCE PREMIUM

0 5 10 15 20 25 30 2008 2009 2010 2011 2012 2013

4.7

6.0

7.5

10.7

20.8

26.0

(10)

10 MONGOLIAN INSURERS ASSOCIATION

₁₀

REINSURANCE RETENTION RATIO

69,0 70,0 71,0 72,0 73,0 74,0 75,0 76,0 77,0 78,0 79,0 2006 2007 2008 2009 2010 2011 2012 2013

76.2

73.4

78.1

74.4

76.4

77.5

73.7

72.3 /in percent/

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INSURANCE DENSITY IN MONGOLIA

0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 20,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1,7 2,0 2,0 2,5 3,0 3,6 5,2 6,3 6,9 9,3 14,0 16,6 19,0

(12)

MONGOLIAN INSURERS ASSOCIATION

₁₂

INSURANCE PENETRATION IN MONGOLIA

0,00 0,10 0,20 0,30 0,40 0,50 0,60 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0.40 0.43 0.38 0.37 0.34 0.32 0.37 0.36 0.39 0.38 0.44 0.57 0.54

(13)

GDP vs Insurance penetration

6,6 8,5 11,2 14,6 18,4 0,39 0,38 0,44 0,57 0,54 0 0,1 0,2 0,3 0,4 0,5 0,6 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 20,0 2009 2010 2011 2012 2013

in trillion tugriks

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14 MONGOLIAN INSURERS ASSOCIATION

₁₄

MOTOR VEHICLE NUMBER

Source: Annual report, National Statistical Office of Mongolia

0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 450 000 2010 2011 2012 2013

254,486

312,542

345,473

384,864

• Average annual growth

is 15% in last 3 years.

• The number is

increased with 40,000

vehicle in a year.

As of 31 Dec 2013

• 35,502 motor vehicles

or 9.3 percent of the

vehicle is covered in

voluntary motor

insurance in 2013.

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MOTOR VEHICLES /BY TYPE/

67%

• 89 percent of vehicle

is private-owned.

• 11 percent of vehicle

is business-owned.

Passenger car Truck Bus Special purpose

67%

23%

5%

4%

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16 MONGOLIAN INSURERS ASSOCIATION

₁₆

MOTOR INSURANCE GAP

Source: Annual report, National Statistical Office of Mongolia & FRC annual report

254 486 312 542 345 473 384 864 22% 14.4% 29.95% 9% , 00 5, 00 10, 00 15, 00 20, 00 25, 00 30, 00 35, 00 0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 450 000 2010 2011 2012 2013

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MOTOR TPL INSURANCE GAP

254 486 312 542 345 473 384 864 50% 23.8% 79% 93.2% 0 10 20 30 40 50 60 70 80 90 100 0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 450 000 2010 2011 2012 2013

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18 MONGOLIAN INSURERS ASSOCIATION

₁₈

THE NUMBER OF ENTITIES IN MONGOLIA

• The total number of

entities in Mongolia is

doubled since 2006.

• 69 percent of the

entities are domiciled in

UB city.

0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 2006 2011

Entities in rural areas Entities in UB city area

12,077

20,327 20,896

45,595

(19)

TYPES OF ENTITIES IN MONGOLIA

Business entities Government entities Non-government organizations

56.4

4.0

6.0 As of 31 Dec 2013

/in thousand/

Staffs in the entities are:

-65% are for businesses.

- 28% are for public entities.

-7% are for NGO’s.

The staff in these entities are

totalled to 559,7 thousand.

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20 MONGOLIAN INSURERS ASSOCIATION

₂₀

CAR (CONTRACTORS ALL RISK)

INSURANCE GAP

in million tugriks

350807,6

450663,1

811272,0

1452208,8

0.39%

0.08%

0.22%

0.28%

0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35 0,40 0,45

0,0

200000,0

400000,0

600000,0

800000,0

1000000,0

1200000,0

1400000,0

1600000,0

2010 2011 2012 2013

Construction works

CAR insurance coverage

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TOTAL POPULATION OF MONGOLIA

2 600 000 2 650 000 2 700 000 2 750 000 2 800 000 2 850 000 2 900 000 2 950 000 2009 2010 2011 2012 2013 2,716,275 2,760,968 2,811,666 2,931,332 2,867,744

• The population is increased

with 1.9 percent on average

in last 5 years.

As of 31 Dec 2013

• 45 percent of the population

are living in UB city area

according to official statistics.

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22 MONGOLIAN INSURERS ASSOCIATION

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LIVESTOCK INSURANCE GAP

36,3 40,9 45,1 1,38% 2,93% 3,55% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0 45,0 50,0 2011 2012 2013