Linking Mongolia's Insurance Penetration to Economic Development (Research Proposal Sample)

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DATE \@ "d MMMM yyyy" 23 March 2016
Linking Mongolia’s Insurance penetration to Economic Development
Abstract
The proposed study intends to examine the level and impact of insurance premiums and investments on Mongolia’s GDP growth as well as linking insurance penetration to Mongolia’s economy. An empirical study will be conducted to assess the significance of insurance penetration in escalating Mongolia’s economic development, stabilizing its economic growth, as well as intensifying the general market in Mongolia. The proposed study intends to examine (sample)Mongolian IRDA (Insurance Regulatory and Development Authority) and the Ministry of finance in order to assess the impact of insurance penetration on Mongolia’s Economy and over GDP. Additionally, it will be imperative to involve MONICPA (Mongolian Institute of Certified Public Accountants) in this study. Finally, it would be significant to carry out a national analysis of panel data probably from 2005 to 2014 as a way of increasing the efficiency of the expected data. Several objectives are to be embraced with possible recommendations being offered for in this proposal.
Contents TOC \o "1-3" \h \z \u Abstract PAGEREF _Toc427826736 \h 11.0 Introduction PAGEREF _Toc427826737 \h 31.1 Historical background of Mongolian Insurance PAGEREF _Toc427826738 \h 31.2 Problem statement PAGEREF _Toc427826739 \h 31.3 Rationale of the study PAGEREF _Toc427826740 \h 41.4 Goals and objectives PAGEREF _Toc427826741 \h 42.0 Initial literature PAGEREF _Toc427826742 \h 53.0 Methodology PAGEREF _Toc427826743 \h 63.1 Research method PAGEREF _Toc427826744 \h 63.2 Sample Location and sample size PAGEREF _Toc427826745 \h 63.3 Research timeline PAGEREF _Toc427826746 \h 63.4 Data collection and analysis PAGEREF _Toc427826747 \h 74.0 Conclusion PAGEREF _Toc427826748 \h 7Works Cited PAGEREF _Toc427826749 \h 8
1.0 Introduction
1.1 Historical background of Mongolian Insurance
Insurance market of Mongolia is still at its infancy due to the fact the Government of Mongolia was the sole and direct provider of insurance for many years. Close to 20 years ago, insurance body has been shifting from a governmental perspective to privatization. This has equally resulted to realization of novel market competitors. Presently, Mongolia’s insurance sector represents only 0.9 percent of financial assets, and 0.54 percent (of Mongolia’s GDP) being the total premium accumulated (CIA, 2013).
Mongolia’s Insurance penetration and concentration are up to date underdeveloped in comparison to other states. For instance, in 2013, the experienced 0.54% (of the country’s GDP) insurance premium was significantly below the expected 2.98% for states under development and the global average of 6.9% (CIA, 2013).
1.2 Problem statement
As stipulated above, Mongolia’s insurance sector represents only 0.9 percent of financial assets, and 0.54 percent (of Mongolia’s GDP) being the total premium accumulated, as of 2014 financial year. This percentage is significantly below the expected average for developing nations (2.98%) and that of already developed countries (6.9%). Therefore, the proposed study perceives this as an important aspect and issue that needs to be handled. By providing possible recommendations that can be utilized by Mongolia’s insurance companies and the ministry of finance and industrialization, the percent of financial assets represented by Insurance sector will automatically meet the average requirements. Therefore, to elevate the economic development via establishing the percentage accounted for by the insurance sector, in the finance sector, there is the urgent need to mitigate the above stipulated challenges. The proposed study intends to come up with possible solutions to tackle this setback.
1.3 Rationale of the study
The most developed countries such as the United States have an insurance premium of more than 6.9% of GDP. This is so because citizens are able to access various insurance packages from both the government bodies and private insurance firms. Therefore, in order to stimulate the economical development of Mongolia there is the need to consider insurance penetration, which is the key objective of the proposed study. This stipulation justifies the need to have this study conducted.
1.4 Goals and objectives
The primary objective of this research is to provide possible recommendations that can be utilized by Mongolia’s insurance companies and the ministry of finance and industrialization, with the aim of achieving the required insurance premiums of 2.98% of GDP emanating from the insurance sector. By the end the proposed study, it is the hope of the researcher that the following goals will be accomplished and recommended to the relevant bodies as far as insurance penetration and economic development is brought into scrutiny. They include:
1. Accessing Affordable insurance services via harmonized fiscal inclusion strategy
2. Establishment of a tactical criterion to enhance access to insurance, and delineated regulatory action course for FRC (Financial Regulatory Commission)
3. Achieve alleviated policies on insurance intermediaries
4. To minimize economic losses via elevating insurance penetration
5. To generate alternatives for insurance issuers to cultivate innovation in product expansion, allocation, and protractible business models
6. To establish a capacity building plan for the FRC
7. To come up with a model that will aid Mongolian insurance providers to establish an independent insurance training facility
2.0 Initial literature
FRC is a governmental facility in control of examination and regulation of all nonbank fiscal actions. The primary Insurance Law was endorsed by Mongolian parliament back in 1997 and later amended in 2004 (Erbas and Chera, 2005). Researchers have previously studied the current topic but their main area of concern was liaison amid insurance market and economic development using panel data. With reference to a preceding research by Bathuyag (2010), it is evident that providence of insurance services in Mongolia far much behind compared to the already developed nations. However, the researchers fail to neither determine the major causes nor recommend possible measures to handle such conditions. Probably, the main reason behind this stagnancy is the unwillingness by vast commercial insurance firms to venture into the micro insurance program, which the proposed study intends to examine effectively.
3.0 Methodology
This part will include the research strategy, sample and sample size, data, research timeline an...