Survived bombing, sold first policy, grew to Cambodia’s largest
One of the pioneers of the insurance industry in Cambodia is Youk Chamroeunrith, the director and general manager of Forte Insurance. On June 13, 1995, he issued the first insurance policy in Cambodia since 1975.
“Before 1975, there had been an insurance industry, but then there was nothing until 1995, when insurance returned,” Youk says.
At the time Youk, worked for the Cambodian National Insurance Company and he insured a shipment of automobile accessories from Singapore to Phnom Penh for $57 per shipment.
“At the time, we had one state-owned insurer, the Cambodia National Insurance Company which had two functions: one as a regulator, and one as a player. You could see a lot of conflict of interest,” he says.
In 2000, Cambodia got an insurance law, and in 2002 an insurance “sub-decree” that provided a road map and a framework for insurance operators.
The sub-decree contained the important legal language and specified requirements about capitalisation ($7 million for insurance companies) and a “solvency margin”.
“As the underwriter, you need to have cash at your disposal to settl claims. In the sub-decree are the guidelines on re-insurance, of how many per cent you retain and re-insure against your capital,” Youk says.
Following the original, state-owned insurance company, Asia Insurance appeared on the scene, followed by Forte Insurance, which began operat-ions in 2000.
Forte, which is headquartered on Mao Tse Tong Boulevard in Phnom Penh, with branches in Battambong and Siem Reap, is a joint venture by Cambodian and Singaporean investors.
Its chairman is Carlo Cheo, a Singaporean with 47 years’ experience in the insurance business. Youk is happy to have Cheo as his mentor.
Youk was born in 1964 and survived the Khmer Rouge period in a child camp, facing starvation.
“I ate my belt,” he says.
Youk’s mother’s village was occupied by the Khmer Rouge, and his father was in Phnom Penh.
“We ran away in early 1972 from the Khmer Rouge area when I was eight years old,” Youk recalls.
Along the way, the family survived a B-52 bombing raid, mostly likely part of Operation Freedom Deal, an American bombing campaign in Cambodia that lasted from May 19, 1970 to August 15, 1973.
“We travelled on three bicycles: my mom with my younger sister, me and elder brother and my sister with my auntie,” Youk says.
“When we saw the plane, we escaped to a safety hole. We had three safety holes, and when we came out we found that all our clothing and luggage had burned,” he says.
Youk was carrying his father’s university degree, part of the family’s important papers, inside his shirt. When the Khmer Rouge soldiers arrested the travelling family, they discovered the degree certificate and took Youk away to be killed.
Luckily, his aunt pleaded with the soldiers as they prepared to take him away and was able to bribe one of them with 500 riel.
After the liberation, Youk’s family moved back to his mother’s home town near the Thai border, then moved to Prey Veng in September, 1979 and finally to Phnom Penh where Youk arrived alone, to get an education.
He studied at the National University of Management and gained a bachelor’s degree in state planning.
After graduating, Youk worked for the Ministry of Finance.
“One of the Thai investors from an insurance company called me to join them. I was with Asia Insurance at the time, and I had learned the business by working with the state-owned insurance company in 1995 and 1996,” he said.
After working for Asia Insurance from 1997 to 1999, Youk registered a new company called Forte Insurance in 1999. Today, Forte is the largest insurer in Cambodia.
“We are number one in Cambodia,” he says. “Our market share is 36 per cent, and we have both corporate and consumer customers.”
Previously in Cambodia, almost 100 per cent of the insurance business was corporate customers, including NGOs, but now the consumer business has grown rapidly to 25 per cent.
Previously, the corporate customers had been NGOs and multinationals. Now the corporate customers are more likely to be local factories and businesses including garments, shoes, steel, electronics, restaurants and hotels.
Our growth is now focused more on construction and infrastructure work,” Youk says.
“They are building power plants, roads, bridges, buildings, and all of them have to have insurance because of the hundreds of millions of dollars in investment."
One of the things Youk is most proud of at Forte is quick settlement of claims.
“We try to settle in an amicable agreement with our clients. We also educate our clients to know how to claim from the insurance company. We have some grey areas in Cambodia that we need to settle outside the courts. We always try to settle outside the courts,” he says.
Forte insures a lot of motorcycle owners and sends adjusters to settle claims on the spot.
“If you get into an accident, we always send our own adjuster team down to help you. We like to settle on the spot, and we try to be fair. We go on your behalf to settle your civil compensation,” Youk says.
Youk says only about five per cent of Cambodians are insured, and if they know you have car insurance, they always ask for more money “because they know you have cash to pay”.
Drunk drivers cannot collect on insurance because they have committed a criminal act, Youk says.
“Our policies pay on civil acts only, not if you commit a crime. So get insurance and behave well,” he advises.
For health insurance, Forte has “cashless agreements” with hospitals including Calmet, Bayon and Royal Rattanat.
“When the policyholder is sick, he is admitted to hospital and they send the medical bill to the insurance company. The policyholder doesn't need to pay anything within the scope of cover.”
For people who want evacuation to Singapore, Malaysia or Thailand, it costs about $2,000 a year for an evacuation policy. For local treatment, the premium is only about $100 a year.
Forte’s biggest strength, Youk says, is insuring property and engineering, which constitutes about 35 per cent of Forte’s portfolio. Medical insurance accounts for about 12 per cent and automobile insurance about 18 per cent.
“We are good at handling claims, and we try to help our clients to claim from their policies. We educate our people about our claims, and we try to help our clients as much as possible to claim from the policy.
"They know us, so we are growing in this area. We try to settle claims fast.”
Youk says most of Forte’s staff has been qualified through distance learning from the Chartered Insurance Institute in London.
“We have qualified staff and very good service,” he said.