Mongolia was one of the six countries who signed the MEFIN Declaration of May 2013 (also known as Cebu Declaration) and signified support to the promotion of inclusive insurance as a strategy for poverty reduction in the region. In January 2016, Mongolia renewed its commitment to the MEFIN Network which was then formalized as a regional platform for peer-to-peer exchange of knowledge and experiences in inclusive insurance.
The financial sector in Mongolia has also been through considerable challenges during the last two decades, but has emerged considerably strengthened by the process. Banking crises occurred in 1995, 1996, and 1999, leading to significant effort expended in strengthening the regulation and structure of the banking system.
The commercial insurance market is still at a very early stage in Mongolia. For many years, the Mongolian Government was the sole and direct provider of insurance. This has changed over the past two decades with the privatisation of the government insurance entity and the emergence of new entrants into the market. Currently, the insurance industry accounts for only 0.9% of the total assets in the financial sector, and gross written premium amounted to only 0.4% of GDP in 2010.
Spurred by mineral resources revenues, Mongolia's economic growth is expected to create a rolling demand in the private insurance market. The Mongolian insurance industry registered a CAGR of 26.7% during the period 2008-2012. However, the industry is relatively small and in its developmental stages.
In 2014, the definition and new regulations requirements for inclusive insurance products have been integrated into existing regulations.
Mongolia is the world's 19th largest country, landlocked between Russia and China. With a population of just over 2.8 million, it has the lowest population density in the world. Over 60% of the population lives in urban areas, approximately 40% in the capital city of Ulaanbaatar. The remaining rural population is scattered over wide distances, resulting in significant challenges in transportation, service delivery and communication. Mongolia's Gini ratio, the coefficient that measures inequality among income distribution, lies at 36.5 and the HDI at 0.727.