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ECONOMY| 07.09.2024

Spain, one of the countries with the biggest growth potential in the insurance industry on account of the demographic transformation

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It ranks 35 out of a total of 179 countries, according to the MAPFRE Economics Insurance Potential Indicator

  • Higher life expectancy in Spain and the reduction in the workforce are increasing the demand on health services, private savings and pension plans.
  • China, India and the United States lead the global ranking of the Demographic Impulse Insurance Potential Indicator (IPAID).
  • Europe’s biggest economies occupy the upper echelons of the table, including Germany (20th), the United Kingdom (22nd), France (23rd) and Italy (30th), all of which are better placed than Spain.
  • The “Demographics: An Analysis of Its Impact on Insurance Activity” report, prepared by MAPFRE Economics in collaboration with Fundación MAPFRE, analyzes how demographic changes affect the economy of different countries.

Spain is ranked as one of the countries with the greatest potential for growth and development of the insurance market, according to the Demographic Impulse Insurance Potential Indicator (IPAID), which ranks Spain 35th out of a total of 179 countries, representing 98% of the world’s population. The indicator evaluates the growth and development capacity of the insurance market, based on the opportunities arising from demographic evolution and per capita income, and suggests that in Spain, the backdrop is very positive for the insurance industry given the need to meet demand in the areas of health and savings. 

These are just a few of the conclusions of the “Demographics: An Analysis of Its Impact on Insurance Activity” study, which MAPFRE Economics has undertaken in collaboration with Fundación MAPFRE, and which highlights that the changes currently taking place in the global population structure directly influence economic development, and, more specifically, insurance activity, mainly given its direct impact on areas such as healthcare, private savings, and the automotive and real estate sectors, among others.

Spain: health and pensions face the biggest squeeze

Low birth and mortality rates in Spain have resulted in a significant population aging process. People under 25 account for just 23.8% of the total population, and it’s estimated that, by 2045, this figure will continue to fall to 19.2%. Meanwhile, life expectancy in Spain has increased, ranking higher than most advanced economies, 84.2 years in 2024 and 86.8 by 2045. According to the study, this transition to a more mature society with a smaller workforce is increasing pressure on Spain’s healthcare and pension systems, creating greater demand for insurance products and services.

The report also highlights that the greater the proportion of the population aged 65 or over and the higher the GDP per capita, the greater the capacity for growth in health spending, a fact that undoubtedly favors the development of private health insurance as a complement to public health care and the growth of private savings as a complement to public pension systems as a higher proportion of the population approaches retirement age. To this end, the report suggests that the GDP per capita of a country is highly correlated to demand for insurance products and services, which increases the potential of the Spanish insurance market.

In contrast, the demographic growth potential of people over 24 in Spain is in the medium-low range, reducing the potential of the real estate market, although, according to the report, this low potential could be partially compensated by the increase in the number of households due to the reduction in average family size.

China and India lead the way

China, India and the United States lead the ranking of insurance potential by demographic impact. In the specific case of China and India, the factor that most contributes to this phenomenon is population weight, which compensates for the lower current contribution of their GDP per capita and their growth prospects. In the United States, the biggest contribution comes from GDP per capita income, prospective growth in terms of health spending and the fact that there are strong growth prospects for the population aged over 24 in the coming two decades. According to the study, this factor will directly influence the expansion of its real estate stock, and, consequently, the development of home and life risk insurance associated with mortgage lending.

It’s also worth noting that the largest economies in Europe are ranked medium-high in the IPAID, occupying higher positions than even Spain does. This is the case of Germany (20th), the United Kingdom (22nd), France (23rd) and Italy (30th), countries that score highly in relation to the estimated growth of private savings, health spending and GDP per capita.

Other countries in this high potential group include Japan (19), on account of its strong potential in terms of population weight, per capita income and health spending, Canada (27), due to its demographic weight and per capita income, Colombia (32) and Argentina (38), whose respective demographic weights increase their savings and health insurance potential, or Peru (44), which has a relatively more balanced position in its partial indicators, increasing its relative position to medium-high potential.

The regions with the greatest potential for growth in private savings are North America, Europe and Australia, and those with the greatest growth potential in health spending per capita are the United States, Europe, Australia and China. 

You can download the full report at (spanish version):