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

  • Kingdom's Covid cluster cases jump to 194

    The Ministry of Health on February 25 confirmed 65 new cases of Covid-19, with 58 linked to the February 20 community transmission. The latest cluster cases include nine Vietnamese nationals, five Cambodians, one each from Korea, Singapore and Japan, with the rest being Chinese. This brings the total number

  • Locations shut, dozens more Covid-19 positive

    The Ministry of Health has closed 23 locations in connection with the February 20 community transmission of Covid-19 and summoned for testing anyone who had direct contact with affected people and places. The number of discovered related infections has risen to 76, including 39 women. In a press release,

  • Cambodia's Covid cluster cases rise to 137

    The Ministry of Health on February 24 recorded 40 more cases of Covid-19, with 38 linked to the February 20 community transmission. Of the 40, two are imported cases involving Chinese passengers. The 38 include two Vietnamese nationals and one Cambodian, with the rest being Chinese. This brings the total cases

  • Covid cluster raises alarm, health bodies urge vigilance

    The Ministry of Health and the World Health Organisation (WHO) in Cambodia have expressed great concern over the February 20 cluster transmission of Covid-19 in the community. Both entities appealed for vigilance and cooperation in curbing further spread of the virus. Ministry spokeswoman Or Vandine said

  • PM confirms third Covid-19 community transmission

    Prime Minister Hun Sen on February 20 announced the Kingdom's third outbreak of Covid-19 community transmission after 32 people tested positive in just over 10 hours. Addressing the public from his residence after an emergency meeting, Hun Sen said: "I dub it February 20 Community Event, in which 32 cases

  • Cambodia's cluster cases jump to 259

    The Ministry of Health on February 27 recorded 26 more cases of Covid-19 linked to the February 20 community transmission, bringing the total to 259 in one week. The 26 include three Vietnamese nationals and one Cambodian, with the rest being Chinese. The ministry noted that five of the Chinese