Cambodia’s insurance industry continues to consolidate and grow apace. In the second-half of 2016, moves were announced to provide civil servants with medical insurance, and new players from more developed economies started taking an increased interest in the Kingdom’s flourishing market.
Dai-ichi Life Insurance, one of Japan’s biggest life insurers, said it would open its first offices in Phnom Penh by the end of July, and plans to begin selling life insurance policies as early as April 2017, according to Japanese media reports.
The company is the first Japanese insurer to enter Cambodia’s small but rapidly growing insurance market. According to the Insurance Association of Cambodia, gross premiums of life insurance grew to $8.9 million during the first quarter of 2016, up 123 percent compared to the same period last year. However, the life insurance market in Cambodia remains one of the smallest within ASEAN countries.
Cambodia’s National Social Security Fund (NSSF) is developing a health insurance and work injuries scheme for civil servants, officials have confirmed.
The NSSF says it has held meetings with representatives of various institutions – including the Ministries of Health and Labour – to work out a plan for the proposed scheme.
If the scheme is approved, insurance that covers illnesses, prenatal care and work-related injuries would be available for about 300,000 civil servants who receive salaries from the state.
A spokesman – who hoped the scheme would kick off by 2017 – said workers would be expected to pay a registration fee, but the amount has yet to be determined. Officials said Cambodia’s civil servants were badly in need of healthcare coverage.
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 percent year-on-year growth in premiums, according to a new industry report.
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 percent year-on-year increase, the Insurance Association of Cambodia said.
Total gross premium across all segments of the insurance sector rose to nearly $56 million during the first half of the year, a 37 percent year-on-year increase.
Bangkok Life Assurance expects to offer life insurance policies in Cambodia by the beginning of next year, according to Thai news outlets, adding to the list of international insurers looking to tap into the Kingdom’s nascent but potentially lucrative market. The Thai-based insurer was granted a licence earlier this year by the Cambodian government, enabling it to set up a joint venture subsidiary with a $7 million registered capital.
Bangkok Life holds a controlling stake in the new venture with 52 percent of shares, according to a company release. Indonesia-based PT Asuranci Central Asia holds a 25 percent stake, while Bangkok Insurance Plc owns 15 percent of shares and Asia Financial controls the remaining 8 percent.
An obscure NGO – TYGi Save Death Association – is providing life insurance coverage to low-income individuals, mostly garment workers, offering a financial safety net for the families of its policyholders, but triggering the concern of insurance regulators who take issue to its unlicensed operations.
It launched operations in late 2015 and now counts 600 “members”, or policyholders, the majority of whom are garment workers between the ages of 30 and 45, according to Nhim Samnang, the NGO’s general manager.
Nearly a year into operations, the micro-insurance scheme remains untested. No members have died, and so no claims have been submitted, Samnang said.
Thailand’s second-largest insurer is looking to enter the Cambodian market by next year, according to reports in local Thai media. Dhipaya Insurance announced it has applied for a licence to operate in the Kingdom and is the latest international insurance company planning to offer services in Cambodia’s growing market.
Two other Thai insurance providers, Bangkok Life and Muang Thai Life, have both announced that they would start setting up operations in Cambodia this year. Dhipaya is talking to local partners, intending to create a new Cambodian subsidiary, media reported.
The company also plans to collaborate with other Thai insurance firms, Panichewa Group and Southeast Insurance Group, to help facilitate the company’s expansion.
Say Sopheatra, project manager of the Cambodian Micro Agricultural Insurance Scheme (CAMAIS), said the impact of adverse weather could surpass last year’s devastating totals, resulting in losses for farmers whose crops are uninsured.
Launched in late 2015, CAMAIS aims to support local smallholder farmers by providing insurance payouts to those affected by severe weather-related events attributed to climate change. According to Sopheatra, 159 rice farmers took out micro insurance from CAMAIS since the start of the year, with a total premium of just under $1,500. She said the micro-insurer’s team was currently monitoring and evaluating claims in order to determine the compensation that affected rice farmers are entitled to.
The bancassurance model, while still relatively undeveloped in Cambodia, has huge potential to drive the growth of the insurance sector, financial industry specialists said during a conference in Phnom Penh.
Robert Elliott, CEO of Manulife, said during a panel discussion that rising incomes in Cambodia were expanding consumer demand for insurance products, while banks offer an ideal platform for the sale of these products.
According to Elliott, bancassurance, as it is practised in Cambodia, involves banks referring interested clients to insurers in exchange for referral fees.
Cambodia saw the highest growth rate for gross premiums in ASEAN last year, though the Kingdom’s insurance penetration and market size remain much smaller than in other countries in the region, according to a new report.
The ASEAN Insurance Council’s (AIC) latest report show that gross premiums in Cambodia grew by 38.4 percent in 2015, while total insurance premiums in ASEAN as a whole grew by 2.9 percent during the same period.
“The insurance industry can play an essential role in supporting and sustaining our region’s economic growth,” the AIC secretary-general said in a release that accompanied the report.
“The overall ASEAN gross written premiums have a compounded annual growth rate of 5.8 percent from 2012 to 2015, indicating the industry’s stable growth and potential, despite the ups and downs of various markets and sectors in our region.”
The Cambodian insurance industry saw continued growth during the first three quarters of 2016, with total gross premiums increasing by 37 percent to $84.9 million compared to the same period last year, according to the third-quarter figures released by the Insurance Association of Cambodia. Life insurance grew by 105 percent, while general insurance increased by 15 percent over the same period.