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Premiums from insurance up after factory fires

Premiums from insurance up after factory fires

Factories are flocking to obtain insurance following high-profile fires earlier this year, said General Insurance Association of Cambodia Chairman Chhay Rattank yesterday.

Insurance premiums from factory and marine segments have increased by 35 percent in the first half, an increase far bigger than in the previous year, while claims also increased significantly due to the fires.

“Previously, factory owners bought insurance just to comply with the law,” he said. But fires at two garment factories this year had served as a wake-up call, as factory owners had successfully collected compensation from Cambodian insurance firms.

GIAC figures show a total of US$13.5 million in premium revenue was collected from January until June, compared with $11.34 million in the period last year.

Forte Insurance has seen its premium revenue increase over 27 percent in the first six months compared year-on-year, driven largely by factory insurance, fire and motor premiums, said General Manager Youk Chamroeunrith.

“We were a bit surprised by the surge in factory insurance — likely the factory owners used to buy insurance abroad, but have changed to buy from us,” he said. “That’s been a big contributor to our growth.”

Youk Chamroeunrith reckoned that the Kingdom’s insurance industry was increasingly proving itself to domestic businesses.

Factory insurance now accounts for about 70 percent of its portfolio, he said.

Infinity Insurance Chief Executive Officer David Carter wrote the firm had seen a substantial increase in premiums during the first six months.

“Property and construction have been good performers,” he said. “But we continue to dominate the health insurance sector.”

Claims also increased significantly in the period, driven by two large factory fires in the first half of the year. The two fires in March and April drove claims to $30.6 million in the first six months of 2011, from about $4 million in the same period last year, GIAC data shows.

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