Life insurance is experiencing explosive growth, leading the pack among all insurance products by year-on-year premium growth during the first quarter of 2016, according to the latest industry figures.
Gross premium of life insurance grew to $8.9 million during the January to March period this year, up 123 per cent compared to the same period last year, the Insurance Association of Cambodia (IAC) said yesterday.
It added that gross premium of general insurance grew to $29 million during the first quarter of 2016, about 20 per cent over the same period a year earlier.
The spike in life insurance gross premium can be attributed in large part to a successful education campaign implemented jointly by life insurers and the Ministry of Economy and Finance, explained Robert Elliot, IAC’s vice chairman for life insurance and CEO of Manulife Insurance.
“A lot of what we’ve been doing is assuring people that we are very committed,” he said. “We’ve been able to demonstrate that the companies that are here are also in other Asian countries and we’ve been working in these other countries for many, many decades.”
He said while total life insurance premiums more than doubled over the past year, the product started from a low base. Life insurance has only been in the Cambodian market since 2012, and the country’s four life insurers are playing catch-up with other regional markets.
“The percentages are rapid but the penetration is still low,” Elliot said. “We have a long way to go because there are 15 million people here, but only 30,000 individuals are on a life insurance policy.”
Kieran Cooney, general manager of BIMA Cambodia, a mobile life insurance provider, also credited the product’s growth to a successful awareness program.
“We face a massive problem with the education levels here and general awareness of what insurance is and how it can benefit people in Cambodia,” he said. “So we continue to run education campaigns that will increase insurance penetration across the county.”
Tola Ponlu, chief customer officer at Manulife, said that the penetration rate of the life insurance sector was only 0.5 per cent.
“We’re not targeting everyone,” he said.
“We believe that things are growing about 7 to 8 per cent on an annual basis and that there is an addressable population.”
He added that the biggest challenge is getting people to invest in long-term financial planning, which is a relatively new concept in Cambodia.