Life insurance was the fastest-growing segment of Cambodia’s rapidly expanding insurance market during the first half of 2016, clocking an impressive 113.2 per cent year-on-year growth in premiums, according to an industry report released yesterday.
However, the Kingdom’s insurance sector grew in all segments, with total gross premium of general insurance – which includes all non-life policies – rising to $37.4 million during the first half of the year, a 16.2 per cent year-on-year increase, the Insurance Association of Cambodia (IAC) said in a release.
Total gross premium across all segments of the insurance sector rose to nearly $56 million during the first half of the year, a 37 per cent year-on-year increase.
“I am very delighted to see both general and life insurance industries grow substantially from quarter to quarter,” IAC chairman Huy Vatharo said in a statement.
“This result shows a greater customer confidence in insurance sectors in the country.”
Vatharo attributed the growth to greater awareness of financial risk management and the important role played by educational campaigns. However, he notes major differences exist in the markets for the two types of insurance.
“The general insurance market is dominated by the commercial sector as companies seek to insure their construction projects and protect their infrastructure against risks like fire damage,” he explained.
“Insurance growth for individuals is much greater in the life insurance sector.”
Life insurance was introduced in Cambodia in 2012 and it is now currently offered by four different providers. Total gross premium reached $18.5 million during the first half of the year, according to Robert Elliott, vice-chairman of IAC and chief executive of Manulife Insurance.
“We have seen consistent growth across all life insurance providers,” he said. “Early entrants have invested in developing staff and this experience is helping drive the growth.”
Cambodia’s insurance industry is benefitting from the country’s strong economic growth over the last decade, its very young demographics and the greater access to information that followed the development of the internet and social media, he explained.
“More and more people appreciate the role life insurance plays in their financial planning, including protection, long term savings, retirement planning and children’s education,” Elliott said.
“Most of the growth is driven by the emerging middle class in the cities. However, we have seen strong and promising growth in provinces outside of Phnom Penh as well.”
The IAC has also been collaborating with the Ministry of Economy and Finance (MEF) to raise awareness of life insurance and improve understanding of the product through educational seminars.
The initiative is helping the country catch up to the levels of insurance coverage seen in other ASEAN countries, Elliott added.