Revenue from insurance premiums rose sharply in the first half of 2013 compared with the same period a year ago, the most recent statistics from the Insurance Association of Cambodia (IAC) show.
As of July 1, premiums in the fledgling industry had climbed about 25 per cent to $22 million, compared with $17.6 million in the first six months of 2012.
An IAC report explains that the largest contributor came from insurance premiums for construction, which went up more than 100 per cent.
Premiums for fire insurance rose about 35 per cent, while vehicle coverage inched upwards by 5 per cent.
Personal accident insurance increased by nearly 15 per cent, and rises in health, marine cargo and miscellaneous insurance premiums came to 8.5 per cent, 8.2 per cent and 22.5 per cent, respectively.
IAC’s President Chhay Rattanak said that growth in the sector was connected to a robust economy and, crucially, broadening public trust.
“The growth rate meets our forecast – this means that economic activity is on the right path,” he said. “Sector growth always runs parallel with economic performance. Another important thing is that the people are starting to understand the industry.”
Residents of Phnom Penh and a handful of provincial cities bought most of the coverage packages, Rattanak said.
He added that the industry maintains its steady growth spurt because of timely payouts for filed claims.
Youk Chamroeunrith, general manager of Forte Insurance, the country’s biggest provider by coverage number, said that premiums rose about 35 per cent in the period.
“You know our people understand about having insurance when they have a car or motorbike, so this is a good sign of the industry’s improvement,” Chamroeunrith said.
Infinity Insurance CEO David W Carter wrote in an email last week that the premium results are somewhat misleading in that they reflect an upswing in mainly garment factory coverage.
“There have been many new factories started in the past year and so far no major fire losses,” he said.
“This industry segment has traditionally had a big effect both positively and negatively on the insurance market. Apart from this segment, the market has grown, and fortunately there have been no major events recorded in the past six months.”
IAC’s data also shows that, in the same six-month period, the total amount of claims paid out by local insurers was $3.4 million, down 63.5 per cent compared with the same period last year.
Carter said that the drop was connected to a decrease in recorded incidents covered by insurance packages.
“Having said this, there have been many uninsured fires and other events, such as building collapses, so the recorded insurance losses are not necessarily demonstrative of the level of risk management in the market,” he said.
In the whole year of 2012, the sector earned total premium revenue of $36 million, up 21 per cent compare to a year earlier.