Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom’s insurers upbeat for 2021

Kingdom’s insurers upbeat for 2021

Content image - Phnom Penh Post
Members attend the General Assembly Meeting of the Insurance Association of Cambodia on October 28. Photo supplied

Kingdom’s insurers upbeat for 2021

After a rollercoaster 2020, the Kingdom’s insurance sector is expected to rebound positively next year backed by better economic growth, with more industry players having quickly adapted to the effects of the Covid-19 pandemic.

The insurance sector’s sizzling growth has been tempered by coronavirus threats since January, like many other sectors in the economy.

“The economic downturn from the outbreak of Covid-19 is expected to have slowed the insurance market in 2020 compared to previous years.

“However, the market will maintain positive growth due to the effective implementation of the government’s measures in combating and controlling the spread of Covid-19,” Insurance Association of Cambodia chairman Huy Vatharo told The Post.

According to the association, the overall insurance market was expected to have grown at 6.5 per cent in 2020, with the general insurance market accounting for 43.6 per cent and life insurance 54.4 per cent, while the micro insurance market’s share is forecast to stand at two per cent.

As of September, the market had garnered total premiums worth $201.7 million, an increase of 8.2 per cent on the same period in 2019.

“Growth is largely driven by the general insurance market, while more nascent sectors, particularly the life insurance segment – which made its debut in the Kingdom in 2012 – are also showing some growth.

“In 2021, with the forecast of economic recovery and an acceleration of the insurance market, the industry will have higher positive growth than this year,” said Vatharo.

Content image - Phnom Penh Post
Insurance Association of Cambodia chairman Huy Vatharo.

Despite the high growth in the insurance market, with average annual growth of 33 per cent in the past five years, the rate of insurance market premiums compared to the size of the economy remained at a measly 0.9 per cent in 2019 – relatively low compared to other countries in the region.

“This indicates that many people and businesses in Cambodia do not have insurance to protect their financial security against various risks,” he said.

The number of insurance operators in Cambodia has increased steadily with major international players beginning to enter the local market, which is seen as a potential growth market, one propelled by better disposable incomes and improved health awareness among the younger generation.

The association had 31 members as of September – 15 in the general insurance category, 11 life insurance players, four micro-insurance companies and one reinsurer.

While general insurance increased by 18.2 per cent and the life insurance segment grew 2.8 per cent, micro insurance fell 21.7 per cent in the third quarter of 2020, the association said.

At the same time, the total assets of all insurers as of the first half of 2020 amounted to some $678 million, of which 63 per cent was injected into the banking system in Cambodia in the form of deposits.

Meanwhile, the global health crisis has forced insurance companies to come up with innovative solutions to the challenges it has posed.

“The impact of Covid-19 pandemic has forced insurers to review their business operations and distribution models based on customer approaches, service management and digital transformation.

“This is because many customers seem reluctant to meet face-to-face with insurance salespeople during the epidemic. This trend may continue long term,” Vatharo said.

The insurance sector has also been active in helping prevent the spread of Covid-19. With the support of the Ministry of Economy and Finance, general and life insurance companies launched the “Covid-19 Health Insurance Consortium” in August to provide coverage for foreign travellers entering Cambodia.

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Banteay Meanchey gunfight sees 15 Thais arrested, three officers injured

    The Banteay Meanchey Military Police have arrested 15 Thai suspects and their accomplices after a gun battle between two Thai groups caused injuries to three police officers in the early hours of November 21, local authorities said. National Military Police spokesman Eng Hy said that according to

  • PM: Do not defile Tonle Sap swamp forest or else

    Prime Minister Hun Sen ordered police to arrest anyone – including government officials – involved with the deforestation of the flooded forests surrounding the Tonle Sap Lake because it is an area important to the spawning of many species of fish, among other reasons. Speaking in a