JUST north of the site of a recent fire and a few blocks from the city's chaotic
boulevards stands the hub of Cambodia's nascent insurance industry: the No Problem
Given the country's accident-prone environment and dearth of insurance regulation,
No Problem Insurance may seem an oxymoron, but insurance entrepreneur Philippe Lenain
believes the Cambodian market is full of promise.
"This is an extremely young market, like Thailand 25 to 30 years ago. It's a
market of high economic growth," said Lenain, director of Indochine Insurance
Union Ltd. His firm is headquartered in a restored colonial villa in the No Problem
Park, a name he optimistically retained from the former business there, No Problem
Most insurance analysts agree Cambodia is set for a surge in the largely untapped
local insurance market.
Despite the lack of regulation now, a draft insurance law is awaiting a vote in the
The law, predicted to pass in 1997, will require automobile third party liability
as well as insurance for the booming construction sector.
Analysts point to a small but growing class of about 50,000 car owners - with only
a handful now insured - as the biggest source of potential growth.
Moreover, they note, there are few competitors.
The state insurance company, Caminco, was created in 1992 after nearly two war-torn
decades without an insurance market.
Caminco oversees the industry in the absence of a national regulatory body, which
will not be set up until the insurance law passes.
It also sells policies, though it has focused almost exclusively on marine cargo
insurance, which is compulsory in Cambodia, said Rath Sa Rath, Caminco reinsurance
In addition, there are four private firms in Phnom Penh who act as agents for Caminco,
Indochine, which started in 1993 and holds a near-monopoly on the market, has recently
been joined by three new players: Thailand-based World Trade, Singapore-based Forte
and Asia Insurance, which is owned by investors from several Asian countries, he
After the insurance law passes, the four agents will be able to operate as full private
companies, said Rath Sa Rath, but he said the government was cautious about licensing
"We have a lot of applications, from more than ten companies, but the government
hasn't allowed those because the market is still small," he told Reuters.
Analysts estimate that about 70 percent of the policies sold by the four agents were
automobile policies, a percentage they said was typical of a young market.
The remaining policies are for motorcycles, construction, worker compensation, health
and fire, said Lenain.
Analysts said almost all policies are held in the capital by foreigners or Cambodians
who are subject to the insurance requirements of foreigners because of business relationships.
Most Cambodians' lack of familiarity with insurance is a barrier to policies, but
that it was having to prepare television commercials explaining the basics of auto
Insurers tell stories of car owners bargaining for higher claims as if at a market
stall, and many accident victims insist, with threats, on immediate compensation
at the scene of a wreck.
There are other problems. Underwriters comfortable with Cambodia were hard to find
until recently, and for Cambodians, whose average per capita gross domestic product
is under $300, premiums are expensive. Auto premiums in Phnom Penh - notorious for
theft and traffic accidents - range as high as those in Paris and US suburbs, said
"It's a bit expensive. But if people can buy expensive cars they will be able
to pay to insure them," said Rath Sa Rath.