Insurance providers sold far fewer motor vehicle and personal accident policies in 2013 than in the previous year, sparking concern among some in the industry that the importance of being covered in case of a road accident isn’t getting through to drivers.
According to the General Insurance Association of Cambodia (GIAC), market statistics show that vehicle insurance – which includes cars, motorbikes and commercial transport – grew 20 per cent in 2012. Last year, that acceleration slowed to 4.3 per cent.
Growth in personal accident policies, which cover injuries as opposed to vehicle damage, also slowed, with its 12.7 per cent rise being three percentage points less than in 2012.
GIAC president Chhay Rattanak said there is a severe lack of public information about the advantages provided by insurance and that this has hampered the young industry’s potential.
“Some people, even commercial vehicle drivers, who have previously bought insurance, do not fully understand how insurance works,” Rattanak said. “We need to help people to understand the benefits of having insurance, especially motor and personal accident coverage,” he said.
Rattanak called on the National Assembly to fast-track the approval of a law that would make it compulsory to buy private vehicle insurance, the norm in many countries around the world.
As it stands, only commercial vehicles such as buses are required to have coverage.
According to the Ministry of Public Works and Transport, 1,727 people died in road accidents in the first 10 months of last year, eight fewer than the same period in 2012. However the overall number of road accidents increased slightly, from 3,905 to 3,934.
Overall, the insurance industry recorded a 15 per cent premium revenue increase in the 2013 fiscal year, totaling $42 million. Across all policy types, engineering insurance premiums saw the largest year-on-year gain of 25.3 per cent.
Rattanak attributed the spike to development in the manufacturing and construction sectors.
Fire insurance premiums maintained a year-on-year growth of 30 per cent over the last fiscal year, while marine cargo insurance premiums increased 1.5 percentage points to more than 8.1 per cent.
Local insurers paid out a total of $3 million in claims, which was lower than 2012, according to Rattanak.