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Fast-growing Cambodia attracts insurance player AIA

With a history that dates back to nearly a century in the Asia-Pacific region, the AIA Group aims to become the world’s pre-eminent life insurance provider. In May this year, AIA began operations in Cambodia, embarking on its first new market venture in 17 years. AIA Cambodia Chief Executive Officer Richard Bates discusses the insurance landscape in Cambodia, as well as AIA’s plans in the Kingdom.

To begin with, why did AIA choose to invest in Cambodia?
AIA is an Asia-based life insurance company, and Cambodia fits well with the overall direction and equity story of the organisation. Cambodia has three main factors that make it an attractive market. Firstly, it’s the rapid economic growth, being north of seven percent per year. Secondly, there is a young and emerging population with a middle-income population bubble rapidly emerging. And thirdly, it is a highly mobile and connected market. From an industry attractiveness perspective, those three factors tick all the boxes. Whereas from a values and cultural perspective, which is important to how we operate as an organisation, it becomes very easy for us to look at helping to protect a society and individuals when the values of that society align with the corporate values of what we stand for — and this is exactly the case in Cambodia.

What do you think of the level of awareness on insurance in Cambodia?
It is fast-growing. There’s been a lot of work done so far in the market to raise awareness on life insurance and the importance of protecting yourself. That continues to evolve. Cambodian culture is built on the family at the core and looking to protect the next generation. Those values need to be in place to have an effective life insurance platform and makes it easy to educate people on the need for insurance. In terms of our experiences, they are aware of insurance and are quickly recognising the benefits.

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What does AIA bring to the table for the people of Cambodia?
The AIA proposition is differentiated from what is offered in the market. Traditional life insurance which is currently sold in the market, looks at assisting families when the breadwinner has a problem, when she or he is either unable to work or has passed away. We have added a Recovery Benefit covering 12 stages of five critical illnesses, including cancer, stroke, heart, liver and lung diseases, so that we can help the breadwinner recover early, before it is too late. Also, it’s important to understand that as people’s lives change, their needs for protection change. So our product is also designed to be flexible to our clients’ changing needs. In summary, it is a flexible product designed to help clients recover from critical illnesses, which also protects their family should the worst happen.

What are some key elements of your marketing strategy for the Cambodian market?
Protecting yourself from critical illnesses is about being aware of your health and being prepared to make adjustments if necessary. Our marketing is driven around promoting individual health and adopting a healthy lifestyle.

We have also designed the organisation with the clients at the core of all our processes. We have a fully digitised process which improves the client experience, making it faster and more efficient for them to get policies issued.

It has been 17 years since AIA has penetrated a new market. Can you tell us about some of the challenges you have faced here that are unique to this market?
AIA is nearly 100 years old and has been a pioneer in almost all Asian markets — there’s little we haven’t faced when it comes to entering emerging markets. Instead, what we’ve seen in Cambodia are more positive factors than challenges that have made this an easier build. People here are hungry to learn and share, the regulatory environment is hugely supportive and, finally, with the high digital adoption rate, we can try things here that we might not be able to elsewhere.

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How do you think the insurance market here will evolve in the future?
We’re very optimistic about it. The penetration is incredibly low. There is great potential for us when you have a young population, fast economic growth, and the development of a segment of society that can afford to protect itself from risk - i.e. there is an expanding middle-income group who are not self-insured, which is where life insurance operates best.

Finally, what is your vision for AIA Cambodia over the next decade?
Our vision here is to build solid foundations over the next five years that will allow the local team to operate the business long into the future. For these foundations to be stable, we are building off the core values of life insurance: protection through healthy living, and are prepared to make the right investment into such areas as critical illnesses that will contribute to the social development of the country.

This interview has been edited for length and clarity.

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