Nippon Life Insurance Company Japan - The Emerging Middle Class

Nippon Life Insurance Company Japan

The second trend across Asia is the rapidly changing complexion of life insurance customers. This is a trend that is more prevalent in the nascent markets of China, India, Indonesia, and Vietnam, and describes the expansion of the insurance market into previously untapped territory. The numbers are staggering: There are 110 million households earning US$10,000 per annum in the 12 countries we studied; by 2012 there will be over 200 million. In the US there were 107 million households with the same income level in 2007 and is expected to increase to 113 million in 2012 the same year, there will be slightly more than 110 million US households with that same income level. This translates to an influx of approximately 200 million new customers into the Asian market over the next five years.

Where do these new customers come from? As Asian countries become wealthier at their breakneck pace of growth, a large middle class is emerging in many of these markets. In China, for example, where 99 percent of urban households were considered "poor" in 1985, by 2005, 22 percent of urban households were considered "middle class," and it is projected that by 2025, about 80 percent of urban households will be in that category. In absolute terms, that means an additional 250 million middle-class households in China! Similarly, in India, the middle class currently only constitutes 5 percent of the population but is expected to be more than 40 percent of the population by 2025.