Cambodia’s insurance sector on the rise

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At present, motor insurance is only required for commercial vehicles in Cambodia. This should change with a new law and boost the insurance market.

Even though Cambodia’s insurance industry is still young and counts just nine insurers of which six are general insurance companies and three life insurers, its growth rate is promising. The sector reached a total premium of $12 million in the first quarter of 2013, a 30-per cent increase compared to the same period in 2012.

Cambodia’s insurance sector is presenting itself as one of the most dynamic in Asia. Over the whole year of 2012, the industry earned a total premium of $36 million, marking a 21-per cent increase year-on-year.

Driving the industry were the fire insurance segment, which accounted for 28 per cent of the total premiums, motor insurance with 19 per cent, personal accident insurance with 18 per cent and health insurance with 14 per cent.

However, Cambodia’s insurance penetration rate is still low compared to other ASEAN countries. It is just around 0.25 per cent of the domestic GDP while, in comparison, Malaysia’s premiums account for 3.3 per cent of GDP in the life segment and 1.8 per cent in the non-life segment, and Singapore’s life insurance premiums are at 4.3 per cent and non-life premiums stand at 1.5 per cent of the city state’s  GDP.

Last year, Cambodia’s first life-insurance firm was launched – Cambodian Life Insurance Company, a joint venture between Cambodia’s Ministry of Economy and Finance, which holds 51 per cent, and four private partners, Indonesian PT Asuransi, Asia Insurance from Hong Kong, Bangkok Life Assurance and Bangkok Insurance Public. The new firm was the first to offer whole life insurance products to Cambodians.

A few months later, Canadian insurer Manulife Financial launched its Cambodian country offices. In January 2013, UK-based Prudential Life Assurance opened its new office in the country and signed a long-term distribution partnership with ACLEDA Bank, a leading Cambodian bank with the largest branch network in the country.

Also this year, a new insurance training center will be inaugurated in order to develop specific insurance expertise that the domestic industry presently lacks. The center will offer insurance-related diplomas accredited by the Malaysian Insurance Institute, a well-known regional training institution with strong expertise in the field, with the purpose of boosting know-how transfer to the Cambodian market.

From the legal perspective, the country’s national assembly is now discussing the introduction of a new insurance regulation to make motor insurance mandatory for all motor vehicles except motorbikes. Currently, only commercial vehicles are legally required to effect an insurance, and the new law proposes that private car owners will have to be covered by at least a third-party liability insurance.

Apart from motor insurance, another promising market niche is the construction sector. Although construction insurance is compulsory in Cambodia, insurance penetration is low due to the fact that controls by authorities are not comprehensive. A stronger enforcement in this context would increase not only building safety but also support industry growth, as Chhay Rattanak, president of the General Insurance Association of Cambodia, pointed out.

Chhay added he expected the Cambodian insurance industry to grow by another 20 per cent in 2013, as the sector was driven “by better overall economic performance.”

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Reading Time: 2 minutes

At present, motor insurance is only required for commercial vehicles in Cambodia. This should change with a new law and boost the insurance market.

Even though Cambodia’s insurance industry is still young and counts just nine insurers of which six are general insurance companies and three life insurers, its growth rate is promising. The sector reached a total premium of $12 million in the first quarter of 2013, a 30-per cent increase compared to the same period in 2012.

Reading Time: 2 minutes

Truck
At present, motor insurance is only required for commercial vehicles in Cambodia. This should change with a new law and boost the insurance market.

Even though Cambodia’s insurance industry is still young and counts just nine insurers of which six are general insurance companies and three life insurers, its growth rate is promising. The sector reached a total premium of $12 million in the first quarter of 2013, a 30-per cent increase compared to the same period in 2012.

Cambodia’s insurance sector is presenting itself as one of the most dynamic in Asia. Over the whole year of 2012, the industry earned a total premium of $36 million, marking a 21-per cent increase year-on-year.

Driving the industry were the fire insurance segment, which accounted for 28 per cent of the total premiums, motor insurance with 19 per cent, personal accident insurance with 18 per cent and health insurance with 14 per cent.

However, Cambodia’s insurance penetration rate is still low compared to other ASEAN countries. It is just around 0.25 per cent of the domestic GDP while, in comparison, Malaysia’s premiums account for 3.3 per cent of GDP in the life segment and 1.8 per cent in the non-life segment, and Singapore’s life insurance premiums are at 4.3 per cent and non-life premiums stand at 1.5 per cent of the city state’s  GDP.

Last year, Cambodia’s first life-insurance firm was launched – Cambodian Life Insurance Company, a joint venture between Cambodia’s Ministry of Economy and Finance, which holds 51 per cent, and four private partners, Indonesian PT Asuransi, Asia Insurance from Hong Kong, Bangkok Life Assurance and Bangkok Insurance Public. The new firm was the first to offer whole life insurance products to Cambodians.

A few months later, Canadian insurer Manulife Financial launched its Cambodian country offices. In January 2013, UK-based Prudential Life Assurance opened its new office in the country and signed a long-term distribution partnership with ACLEDA Bank, a leading Cambodian bank with the largest branch network in the country.

Also this year, a new insurance training center will be inaugurated in order to develop specific insurance expertise that the domestic industry presently lacks. The center will offer insurance-related diplomas accredited by the Malaysian Insurance Institute, a well-known regional training institution with strong expertise in the field, with the purpose of boosting know-how transfer to the Cambodian market.

From the legal perspective, the country’s national assembly is now discussing the introduction of a new insurance regulation to make motor insurance mandatory for all motor vehicles except motorbikes. Currently, only commercial vehicles are legally required to effect an insurance, and the new law proposes that private car owners will have to be covered by at least a third-party liability insurance.

Apart from motor insurance, another promising market niche is the construction sector. Although construction insurance is compulsory in Cambodia, insurance penetration is low due to the fact that controls by authorities are not comprehensive. A stronger enforcement in this context would increase not only building safety but also support industry growth, as Chhay Rattanak, president of the General Insurance Association of Cambodia, pointed out.

Chhay added he expected the Cambodian insurance industry to grow by another 20 per cent in 2013, as the sector was driven “by better overall economic performance.”

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