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S-curve growth
models for insurancepenetration
Mabel Ramírez, Industrias Peñoles, M!ico
"apen Sinha, I"#M, M!ico
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Rudolf Enz´ s-curve*
$ "he S-%urve Relation &etween per-capita Income and Insurance Penetration, Published b' "he (eneva Papers on R, .o+ / 01ul', 2223 pp+ /45-625+
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Rudolf Enz´ s-curve: Penetration Life
• Minimum
penetrat
• Ma!imumpenetrat
• In8ectionU!"3#8per capit
• Ma! incoelasticit'U!#0per capit
%hart depicts the s-curve using onl' points for the 'ear :44;+
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Rudolf Enz´ s-curve: Penetration &on-L
• Minimum
penetrat
• Ma!imumpenetrat
• In8ectionU!(#8)per capit
• Ma! incoelasticit'U!"$#0per capit
%hart depicts the s-curve using onl' points for the 'ear :44;+
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e+ican ,nsurance aret
• Penetration and per capita (9P for the period7 :
2:2+
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e+ican insurance enetration
•Income elasticit' in the model of =nz+
•:46-:4; 7 >?ow income stage@
•:4;-2:2 7 >=!ponential growth stage@
/ear Estiated in. and a+.
1oundaries for insurance det2
Real insuran
enetratione+ico4
222 0:+:;5AB , :+:;A/B3 :+:B
2:2 0:+/5B, :+42B3 :+45B
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e+ican insurance enetration
•%orrelation between Penetration and per capita (9Pmodel of =nz+
•:46-:4; 7 >9emand-Collowing@ pattern
•:4;-2:2 7 >9emand-Collowing@ pattern
5raner 7ausalit
9irection e of causalit ustained;
P=.
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e+ican insurance enetration
• FofstedeGs cultural dimensions7
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2e deand for life insurance in e+ico U=
ruett and ruett4
$ Published b' "he 1ournal of Ris) and Insurance, *ol+ A, .o+ 01une, :4423 pp+ /:-/;+
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>2 ruett and ruett analsis is ?ron
Variable Type of variableADF
statisticUn
Roo
per capita GDPMexico
Level2.382996 Ye
Logarithmictransformation 0.124402 Ye
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7onclusions
• "he s-curve model is a countr' comparison of diHerent level
capita income, but is not a reliable predictor on insurance penfor an individual countr'+ %orrelation between insurance penand per capita (9P does not predict how insurance penetratrise as the countr' becomes wealthier over time+
• "he use of s-curve models e!plaining the insurance mar)et penin a specic countr' or line of business presents a numtheoretical and practical problems+ Individual adJustment b' co
based on assumptions of economic growth and social behavcannot be applied in general+ "herefore, if this heterogeneitac)nowledged, the results given b' an s-curve will onl' be appli>an average countr'@, raising the Kuestion of the e!istence of athat can serve as LrepresentativeL for this t'pe of anal'sis+
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7onclusions
• e need to consider that the assumption of >one-in-a-)ind i
0represented b' the (9P per capita3 for a whole countr' supercial, income distribution inside a countr' ma' himpact on the aggregate insurance demand+
• Curther anal'sis must be performed to identif' a modaddress individual characteristics for each countr'
• Nurich < in-depth surve' of the factors that have slow
e!pansion of insurance mar)ets in ?atin #merica7 lac) of sueducation about insurance as the greatest impediment to development+ Dther factors were lac) of condence in the s'stem and law enforcementOs failure to collect informatiothefts and automobile accidents+
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"han) 'ou