Although premium revenue for Cambodia's six big insurance companies rose 19 per cent last year, total claims grew at a rapid 178 per cent, according to official data from the General Insurance Association of Cambodia.
Sovan Philong/Phnom Penh Post
An Infinity billboard situated along a road in Phnom Penh.
GIAC's data revealed that total premium revenues were US$29.7 million in 2011, but they were surpassed by total claims of $33.5 million.
“The insurance industry has grown as we expected, in terms of premiums. This growth is attributed primarily to the economic performance of the country and people's awareness of the insurance industry,” Ty Atith, assistant to GIAC's chairman, said.
“But the industry was hit by a handful of severe claims that will be hard to manage. The claims will badly impact on the entire insurance industry from this year forward,” he said, in reference to the claims filed after two large garment factories in Phnom Penh, worth a purported $22 million, burned down.
Fire insurance managed the largest share of the Kingdom’s insurance market at 26 per cent, followed by auto insurance at 19 per cent.
Cambodia Vietnam Insurance chief executive Cao Minh Son said premium revenue had increased a steep 83 per cent to $1.74 million in 2011.
He attributed this rise to increasing insurance investments in the aviation sector, which paid $820,000, followed by property and motor insurance.
Of the total premium revenue, 18.4 per cent was paid in claims totalling around $320,000.
Youk Chamreounrith said the industry was not reaching its potential and blamed losses on poor regulation and enforcement.
“Our growth would be much more than the data currently indicates if the law was more fully followed," he said, mentioning that some corporations still did not buy domestic insurance.
“Most countries' insurance laws require its companies to buy insurance from domestic companies.”
Ty Atith has urged ministries and government institutions to co-operate with GIAC in enforcing the law.
“Of course, we need their co-operation. We are alone, and we don’t have the ability to do on-site observations on whether those companies buy insurance or not, especially the big construction investment companies," he said.
Ty Atith projected that the industry would continue to grow at about 20 per cent year-on-year.
Infinity Insurance chief executive David W Carter said his company's experience had been positive.
Carter said Infinity’s premium income had risen 11.7 per cent to $6.7 million in 2011, compared with $6 million the year before, and construction and property insurance were pushing the growth.
Any claims had been within budget projections, he said.
“We once again achieved very good results last year, which reflects our disciplined approach to risk selection and underwriting.
“We have been able to avoid exposure to major losses, which contrasts with the experiences of our competitors in the market.
“We are now well positioned for 2012, which, following a year of many catastrophic losses around the world, will lead to a strong tightening of terms, including an increase in insurance premiums.”
Youk Chamreounrith, director-general of Forte Insurance, said Forte's premium revenue had risen more than 20 per cent last year, but the number of small claims was rising.
More costly “severity claims”, however, were down, he said.