China and India and other emerging economies offer “wild ride” opportunities for insurers as growth in mature markets such as Australia stagnates, law firm Sparke Helmore says.

“For Australian insurers it’s hard to ignore that Asia Pacific is home to nearly a third of the world’s population,” Commercial Insurance Partner Gillian Davidson says.

“With India, you have a vast under-insured nation. You also have a Government that is about to implement a second wave of reforms in the insurance sector, with an agenda to increase foreign participation.”

China has the second-largest insurance industry in the world, with two of the top-five insurers, but foreign-funded companies still face some obstacles.

Sparke Helmore is part of legal firm alliance Global Insurance Law Connect (GILC), which has produced the Spotlight on Emerging Markets report, which also highlights Brazil and Mexico.

The report says emerging markets are rapidly growing, but may also carry higher risks that need to be understood by companies looking to explore their options.

“The opportunities are endless for insurers willing to go on something of a wild ride,” Ms Davidson says.

IAG this month said it would sell its 26% stake in the SBI General joint venture in India, the latest exit by the company in a wider pull-back from Asia as it sharpens its focus on Australia and New Zealand.

Business commentator John Durie, writing in The Australian, called the decision “arguably the dumbest” that IAG CEO Peter Harmer has made in his career and one that is akin to “walking away from a potential gold mine”.

India has gross written premium of $US100 billion ($146 billion) and a growth rate of 10.1%. according to the GILC emerging markets report.

“As growth within the mature insurance markets stagnates, and I would include Australia, in this bucket, carriers and brokers are looking for opportunities for growth in emerging economies,” National Practice Group Commercial Insurance Leader Chris Wood says.

“And when you consider that these economies include global giants China and India, you can see how important the ‘emerging’ players are for insurers.”