With business now global, and the U.S. economy beginning to turn, it's a good time to enter the emerging markets.
It's always a good time to enter emerging markets. Despite drawbacks, population growth in these markets is outpacing projections for developed markets. Emerging markets have, in fact, emerged.
China? China emerged more than 20 years ago. India? It emerged more than a decade ago. Brazil? It, too, emerged years ago, and people noticed. U.K. insurer Prudential PLCannounced in March that it is planning toopen offices in Brazil, andLloyd'shas already been there for several years, ever since 2008 when private reinsurance companies wereallowed to sell reinsurancein that market.
For global companies seeking growth, the proverbial good old days of the emerging markets are now -- not a few years ago, not in a few years' time -- but now.
There's more risk, sometimes a lot more risk, with emerging markets. Though that's true, it's nothing new. Entering any market, has always meant taking chances.
The Internet has made it easy for companies to establish a virtual if not a physical presence in emerging markets at a fraction of the cost of yesteryear. Cell phones have turned long-distance communications and relationships into a matter of course. Years ago, it used to cost $10 for a 30-minute call to Europe from the United States. Today business owners pay just a few cents to Skype or text contacts abroad.
More than 80 percent of middle market companies now have global operations in developed and emerging markets. Even small businesses have a reach that they could only dream of at the turn of the 21st century.
How can you compete in the future, if you're not in markets like China, Thailand, Indonesia, India, South Africa or Nigeria? That's where growth is coming from and you can't afford to be focused just on the United States, Germany or Japan. Why overlook opportunity, especially when the long-term outlook for certain sectors of the U.S. market are bleak.
Young, growing markets want access to demand provided by consumers in mature economies so there is every reason to take a chance -- smartly -- on an emerging market, whether you are selling property/casualty coverage, cars or airplanes, or custom-made guitars.
The United States was once an emerging market. English entrepreneurs took a chance on the young nation. U.S. businesses reciprocated. Looking back, it's likely both sides were glad they did.
CYRIL TUOHY is managing editor of Risk & Insurance®. He can be reached at firstname.lastname@example.org.
May 1, 2012
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