Subscribe Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - Insurance and banks join forces

Insurance and banks join forces

Insurance and banks join forces

Mom Pagnahei encourages Cambodians to consider life insurance for security.  Photograph: Chakriya Khiev/Phnom Penh Post

Cambodia Life Insurance Company Plc plans to bundle services with banks to offer guarantees on mortgages, company representatives said.

The service is hoped to make mortgages more accessible in a country where housing loans are still considered risky business. Collateral is usually required to take loans in Cambodia.

Cambodia Life customers would be able to back up mortgages with a Cambodia Life plan in the event that payments cannot be made, In Meatra, the company’s director general, said yesterday at a life insurance workshop in Phnom Penh.

The service would bundle life insurance payments and overdue mortgage payments into a single premium, and potentially lower the risk of default.

The insurance firm, Cambodia’s first to offer comprehensive life insurance coverage, was in discussion with 20 commercial banks on developing the product.

So Phonnary, executive vice president of Acleda Bank, confirmed that the bank was in talks with the insurer. The product could reduce the need for collateral on loans but could also increase costs to customers, she said.

“Our loans are still small and we always need collateral from customers if they borrow from us to buy a flat or house. But, we don’t require them to have insurance on that house. Right now, we have not made any link to [this product] because it can put more cost to borrowers,” she said.

However, So Phonnary said the bank will consider the proposal to cooperate with life insurance in the future.

Acleda has provided about US$85 million for housing loans, she added. The benefits to customers and banks would be mutual, as customers would reduce the chances of losing homes, and banks the potential for non-performing loans, In Meatra claimed.

“Long-term housing loans have a lot of risk. Customers have to consider whether they should buy life insurance because it can cover outstanding loans if they have a problem,” he said.

“Their benefit is that their house will not be seized by the bank. At the same time, the bank will also get payment from life insurance and a [reduction of] risk. It means that we can diversify investment risk.”

With only two newly launched life insurers, the market for life insurance products was still small compared to that for general life insurance, the secretary of the General Insurance Association of Cambodia Oeurn Chanvisoth wrote in an email yesterday.

“We only expect that when life insurance becomes a full force in the market that it will help generate more premium for our insurance industry, both for life and non-life insurance,” he said.

To contact the reporter on this story: May Kunmakara at [email protected]


  • Professor beaten by mob in Phnom Penh after alleged hit-and-run

    Updated with new information: 6:44am, Tuesday March 13 2018 A university professor accused of a hit-and-run has been transported to Vietnam with serious head injuries after he was brutally beaten by a mob in Phnom Penh late Sunday afternoon. A video of the attack shows a group

  • American ‘fugitive’ arrested in Cambodia outside of US Embassy

    An American citizen was arrested on request by the US Embassy in Phnom Penh on Tuesday, according to Cambodian police. Major General Uk Hei Sela, chief of investigations at the Department of Immigration, identified the man as American Jan Sterling Hagen, and said he was

  • One Australian, one Cambodian killed in explosion at military base

    Updated: 5:20pm, Friday 16 March 2018 An Australian tourist and a Cambodian soldier were killed in an explosion on Thursday afternoon at an army base in Cambodia’s Kampong Speu province. The Australian, whom the government initially identified as a technical demining expert in his 40s, and

  • Australians protest Asean summit visit by PM Hun Sen

    Hundreds of protesters gathered in Sydney’s Hyde Park on Friday to protest against Cambodian strongman Hun Sen, who claimed to have been gifted millions of dollars by the Australian government ahead of a special Asean summit this weekend. An estimated 300 protesters, the majority of