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Insurance premiums in Covid slump

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Forte Insurance’s gross written premiums (GWP) grew by 10 per cent last year, just over the 9.6-per-cent national average. SUPPLIED

Insurance premiums in Covid slump

The Cambodian insurance sector’s gross written premiums (GWP) for 2021 amounted to $297.6 million, up by just 9.6 per cent from a year earlier, compared to an average annual growth rate of over 23.5 per cent over 2016-2021, according to the Insurance Association of Cambodia (IAC).

Of that, general and life insurance premiums came to $57.9 million and $72.8 million, up by 17.5 per cent and 9.7 per cent year-on-year. Micro-insurance premiums, however, dipped by 17.7 per cent to $2.8 million, the IAC reported.

As of end-2021, life, micro-, and other non-life insurance policies covered 1.3 million, 0.38 million and 0.55 million people, or a total of 2.2 million, which marks a 32 per cent year-on-year rise.

For reference, national GWP surged by 35.6 per cent year-on-year to reach $113.6 million in 2016, then rose to $151.6 million in 2017, $196.4 million in 2018 and $253 million in 2019, before slowing to grow by just 7.31 per cent to $271.5 million in 2020, IAC figures show.

IAC president Huy Vatharo told The Post on June 7 that the insurance sector paid out $41.2 million in claims last year. General, micro-insurance, and life accounted for $29.7, $0.76 and $10.6 million – $8.3 million of the latter was in death claims.

He said the increase in premiums highlights an increasing understanding of the value of insurance as a hedge against the risk of a contingent or uncertain loss.

“The more insurance we take out, the stronger and more resistant to various risks our financial safety net becomes,” Vatharo said.

Still, he noted that the ratio of national GWP to gross domestic product (GDP) is only about one per cent, as opposed to four-to-five per cent in neighbouring countries, and seven-to-eight per cent in developed economies.

“Based on this data, we can safely say that the uptake of insurance services in Cambodia is still low. We really do want to encourage Cambodians to get more insurance coverage,” he said.

Forte Insurance Group CEO Youk Chamroeunrith ascribed the dip in GWP across the industry to changes in incomes and travel patterns amid the Covid-19 health crisis.

He reported Forte Insurance’s GWP growth for 2021 at 10 per cent, just above the national average, which he noted fell short of pre-Covid levels. In 2022 however, Chamroeunrith expects the company’s GWP to outpace last year’s rate.

According to Vatharo, 40 insurance companies currently operate in Cambodia: 18 general insurers, 14 life insurers, seven micro-insurers and one reinsurer.

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