Campu Lonpac Insurance General Manager Chan Lek Wei answered some questions this week about his company and a new insurance product aimed at rubber plantations.
You have a new insurance product to insure rubber plantations. What do you cover?
We have recently developed and will be introducing a new insurance policy specially designed for rubber plantation. It is a ‘fire policy for the insurance of growing trees – rubber’. Besides covering the risks of fire and lightning, this policy can be extended to include other associated risks like damage caused by animals, floods, windstorms, damage caused by aircraft or other aerial devices dropped therefrom, riots, strikes and malicious damage.
Is this new for Cambodia?
This is a totally new and exciting product for rubber plantation owners in Cambodia. We look forward to being the first insurer to provide cover for growing rubber trees. We will be providing all relevant details and seek the blessing from the Ministry of Economy and Finance before launching this new product; tentatively by the fourth quarter of this year. As a start, we are only introducing the insurance cover for rubber trees. In the future, we plan to extend this type of insurance product for other kinds of plantation and crops as well.
Do they have such plantation insurance in Malaysia?
Such plantation cover is available in Malaysia. Besides rubber, insurance for oil palm and rice growers are also available in Malaysia as well.
How do you apply the insurance coverage to a rubber plantation?
The sum insured is based on the value of the rubber trees per hectare. Depending on the age of the rubber trees, the value per hectare is unique in that it is pre-fixed and agreed by both the rubber plantation owner and Campu Lonpac Insurance Plc at the onset of the insurance. The value is derived by adding up the purchase price of seedlings plus maintenance of the plantation that includes the cost of felling, clearing, plowing, planting, upkeep including weed and pest or disease control, manuring and other overheads. In the event of a claim, the amount and method of loss settlement is also very clearly spelled out in our policy. For example: Where more than 80 per cent of the trees in a field or an area in the aggregate are destroyed to an extent requiring replanting, the entire field or area will be treated as a total loss provided the entire field or area is replanted. Settlement is 100 per cent for trees whose tap roots are broken; trees which are destroyed by stagnant water; and trees with more than 75 per cent of the bark destroyed up to a height of 10 feet. Settlement is 50 per cent for trees with more than 50 per cent of the bark destroyed up to a height of 10 feet. The plantation owners can refer to the policy contract for the full list of coverage and terms and conditions under this policy.
Is it expensive to purchase this kind of insurance?
Insurance premiums are usually very small when compared to the value of the risk at stake. You may be surprised that the estimated premium for a small plantation with sum insured of $250,000 is in the region of only $1,000 per year.
How do you see the plantation industry evolving in Cambodia in general?
The government of Cambodia has plans to cultivate the rubber industry as one of the main industries in the country. Currently, the total hectare with rubber is about 120,000 hectares and the government intends to expand this to 150,000 hectares by year 2015. In the near future, the government estimated that the income of 10 per cent of the population will be derived from the rubber industry. As the economy of the country grows, it is a natural progression that there will be more investors and the size of the plantations will also increase. Insurance is based on the law of large numbers. Once there is sufficient number of interested owners to purchase insurance, there is a spread of risks and additional cover for other types of plantations, besides rubber, will be made available.
What is the main business of Campu Lonpac Insurance?
We are a general insurance company and our products include property insurance that covers fire and named perils, property, all risks, electronic equipment, machinery breakdowns, burglary, marine cargo and private car. We also have what’s called pecuniary insurance that covers business interruption, machinery breakdown, loss of profit and money. Another is liability insurance that covers public liability, product liability, and professional indemnity. Our employee’s benefits insurance covers group personal accidents, group hospital and surgical. Finally, our project insurance includes coverage for contractor’s all risks, erection all risks and workers’ accidents.
How long has Campu Lonpac been in operation?
Since our incorporation on August 15, 2007, our staff force has grown to 50 and we have a team of highly trained personnel to meet the demands of the customers. Our teams of dedicated and competent claims personnel are always ready to provide our clients with 24 hours claims assistance.
How do you insure loans from Cambodian Public Bank Plc?
We work closely with our parent company, Cambodian Public Bank Plc through Campu Bank’s wide distribution network. The property owner can obtain the necessary loan from any of the bank’s 25 branches upon meeting the bank’s requirements. When the insurance policy is issued, the interest of Campu Bank will be noted in the policy to protect both the interest of the owner and that of the bank.
How do you see the insurance market evolving here in Cambodia?
Traditionally, the insurances that are available in the country are the basic fire, motor, personal accident and health policies. As the country progresses, the types of products being introduced will also grow in tandem to cater to the needs of the insuring public.