The bancassurance model, while still relatively undeveloped in Cambodia, has huge potential to drive the growth of the insurance sector, financial industry specialists said during a conference in Phnom Penh yesterday.
Robert Elliott, CEO of Manulife, said during a panel discussion that rising incomes in Cambodia were expanding consumer demand for insurance products, while banks offer an ideal platform for the sale of these products.
“Cambodia is a country that has been experiencing high GDP growth and so there are more and more people entering the middle class, and in doing that they start to think more long term,” he said.
“For the insurer, it is a significant new customer base, and for bank customers, there is increased comfort in purchasing insurance from banks as they generally have a stronger brand trust.”
According to Elliott, bancassurance as it is practised in Cambodia involves banks referring interested clients to insurers in exchange for referral fees. This allows customers to gain information on several financial services at once while giving institutions a chance to broaden their activity.
In other countries, banks and insurance companies bundle their products.
Or Saovanna, deputy general manager of Forte Insurance, explained that product bundling aimed at pairing complementary products.
“All insurance can be bundled into the bank package and sometimes the price is not separate from the bank product for customers,” he said.
“For example, in many cases car insurance is always bundled with car loans, or home insurance is bundled into loans for leases and so on.”
Neth Piseth, senior vice president and head of financial services at Acleda Bank, told the Post that his bank was definitely interested in bundling, but Cambodian regulators had not yet approved it. For now, it can only inform bank customers of suitable insurance products.
“We do not combine our products with the insurer’s yet, we only refer our bank clients to insurance companies if they are interested in certain products,” he said. “Insurance companies educate us about their products and then we can explain them to our clients.”