Gross life insurance premium in the Kingdom exceeded gross general insurance premium last year for the first time following an increase in the number of operators, as well as rising consumer demand.
Though the Kingdom’s insurance industry generated $196.4 million in gross premium at the end of last year, Insurance Association of Cambodia (IAC) president Huy Vatharo on Thursday said gross general insurance premium reached $87 million, micro-insurance $9 million, and life insurance $99 million.
“In addition to risk protection, life insurance provides savings for customers, meaning that if customers don’t face any unfortunate incidents they can get back some money at low interest rates,” he said.
However, Vatharo said both general and life insurance have distinct advantages as their approaches to risk coverage differ. He added that it is standard for life insurance premium to be higher than general insurance.
Life insurance first appeared in the Cambodian market in 2012 when Cambodia Life Insurance Plc, a joint-venture between the Cambodian government and four foreign private firms, was launched, becoming the first ever life insurance firm in the Kingdom.
In the same year, the sector was joined by Canadian life insurance firm Manulife and then Prudential Corporation Asia before other firms in the following years.
General Insurance services got off the ground in Cambodia in 1990 through the state-backed Cambodian National Insurance Company (Caminco).
According to IAC figures, as of last year there were eight life insurance companies operating in the Kingdom and 12 general insurance companies.
Speaking to reporters at an Asian Claims Convention seminar held in Phnom Penh on Thursday, Mey Vann, the General Department of Financial Industry director-general under the Ministry of Economy and Finance, on Thursday said the Cambodian insurance industry has seen remarkable growth of about 35 per cent per year over the last five years.
Cambodians have seen increasing incomes as the Kingdom has risen to lower-middle income country status, which has improved their living conditions and financial management.
“Cambodians are now able to save up in the financial sector and save through risk protection via the insurance sector,” he said. “The rise in insurance premium at 35 per cent per year over the last five years reflects the distribution of resources from economic growth.”
Vann did not disclose the amount that the sector has paid out in claims within the last five years, but said the amount is nearly half of the insurance premium that has been sold so far.