Mongolia's insurance sector has seen a remarkable expansion in the past decade, as premiums have risen more than eightfold to ₮474.9 billion ($137 million) in 2022.

A spectacular surge

The industry has benefited from a growing middle class, rising disposable income and increased awareness of the benefits of insurance. The government has also introduced policies to support the sector, such as mandatory health and motor insurance.

• The total premiums collected by insurers rose from ₮56.8 billion in the fourth quarter of 2010 to ₮474.9 billion in the same period of 2022, according to data from the Financial Regulatory Commission. The total revenue from premiums increased 9.6 times to ₮304.8 billion over the same period.
• The net premiums earned by insurers, which reflect their profitability and customer retention, also grew significantly, from ₮23.5 billion in 2010 to ₮188.7 billion in 2022.

The bigger picture

However, Mongolia's insurance sector remains underdeveloped compared with the global average and its regional peers. The insurance premium revenue accounted for only 0.63% of Mongolia's gross domestic product in 2022, far below the world average of 7.16%.

Mongolia's insurance industry is relatively young, having started in 1997 with the enactment of the Insurance Act. Since then, the sector has evolved and diversified, offering a range of products and services to individuals and businesses.

• The challenges: low public awareness, high operating costs and regulatory uncertainty. The Covid-19 pandemic has also posed risks to insurers' solvency and liquidity.

Despite these hurdles, Mongolia's insurers have shown resilience and innovation, adapting to changing customer needs and market conditions. The sector has potential for further growth and development, as Mongolia's economy recovers from the pandemic and its population becomes more affluent and urbanized.