Logo of Phnom Penh Post newspaper Phnom Penh Post - Revenue of insurance sector rises 7.3% to $271M in 2020

Revenue of insurance sector rises 7.3% to $271M in 2020

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Gross written life insurance premiums grew at 10.5 per cent last year to $113.8 million. FACEBOOK

Revenue of insurance sector rises 7.3% to $271M in 2020

The insurance sector in Cambodia earned $271.5 million in premiums last year, increasing by 7.31 per cent from $253 million in 2019, even as most of the service sector showed negative signs in 2020, the Insurance Association of Cambodia (IAC) reported on May 12.

Of that, general and life insurance premiums came to $113.8 and $152.3 million, surging by 10.5 and 6.6 per cent year-on-year, and accounting for 41.9 and 56.1 per cent of the total.

Micro-insurance premiums were to the tune of $5.4 million, down by 24.6 per cent year-on-year, and accounted for just two per cent of the total, IAC said.

Without providing concrete figures, it listed fire, engineering, health, vehicle and “other accidents” as notable sub-segments of general insurance that also saw year-on-year gains in premiums last year.

The insurance sector paid out around $37 million in claims last year, up by five per cent year-on-year, it said. General, life and micro insurance accounted for $29.1, $6.9 and $0.9 million.

IAC chairman Huy Vatharo told The Post on May 13 that increased awareness of the importance of insurance among companies and the general Cambodian population enabled the market to grow amid the Covid-19 pandemic, even if not as fast as in previous years.

He added that positive momentum in the sector was further fuelled by the Ministry of Economy and Finance's mission to create a favourable market environment and legal framework that provides greater confidence among policyholders.

"The insurance sector in Cambodia is growing significantly, which is reflected in the greater levels of awareness about the benefits of insurance, and increased trust from customers from year to year," he said.

With an air of uncertainty hanging over the Kingdom as it grapples with the February 20 community outbreak of the novel coronavirus, Vatharo said the future of the insurance market remains in a haze.

Still, he voiced optimism that growth in industry would remain in positive territory, albeit lower than in 2020.

According to Vatharo, the insurance sector in Cambodia has grown by an average of about 30 per cent each year over the past two decades.

Youk Chamroeunrith, Group CEO of Forte Insurance, said the company logged a nearly 10 per cent growth in premiums last year, down from 13 per cent in 2019, with vehicle and health insurance occupying the lion's share.

He said a better level of knowledge of insurance products and situation management amid Covid-19 were the main drivers for keeping the market positive.

Noting that the pandemic did not leave much of an impact on the insurance market last year or in the first quarter of 2021, Chamroeunrith signalled concern about the second quarter over the latest outbreak of the virus.

But even in a grim scenario, turmoil in the insurance sector would likely have ill effect on greater national economic development.

As Chamroeunrith noted, insurance spending accounts for just 0.4 per cent of the Kingdom's gross domestic product (GDP), whereas that rate is between six and seven per cent in neighbouring countries.

IAC said it currently comprises 31 insurance companies – 16 general insurers, 11 life insurers, five micro-insurers and one reinsurer.

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