The director and general manager of Forte, Cambodia’s largest insurance company, says his business grew by 33.5 per cent this year compared to same eight month period of 2011.

“People have started to understand the importance of insurance in the lives,” said Youk Chamroeunrith.

“Medical insurance has grown and automobile insurance has grown. I think the awareness of the importance of insurance has increased compared to last year,” he said.

During the period, automobile insurance grew by 20 per cent and medical insurance grew by 38 per cent, according to Youk.

Forte Insurance, located on Mao Tse Tung Boulevard, remains the largest insurance company in Cambodia by market share, with 38 per cent, he said.

“Our biggest portfolio is still property and engineering, covering construction, machinery and office towers,” he said. “We insure many of the high rise buildings along Monivong, including Phnom Penh Tower.”

Forte employs 70 people and has offices in Siem Reap and Battambang.  Forte’s Battambang office opened this year and is slowly accumulating customers in the predominantly agricultural area.

While others in the industry may be frightened by the arrival of Manulife in Cambodia, Youk welcomes their arrival as a force for education and training for the entire industry.

“Right now the insurance climate has big changes, because the life insurance is coming in. The arrival of these companies stimulate of the growing of the industry.  Companies like Manulife have experience in other countries, and share they share that experience with the regulator as well,” Youk said.

“With the arrival of the life insurance industry, they are able to reach out to the general public and make people more aware of insurance which makes the whole industry grow more rapidly,” he said.

“Some of our competitors are scared when they come, but I welcome them because together we can grow the industry. For us, the arrival of companies like Manulife are a compliment to the industry.”

Speaking about trends in Cambodia’s insurance industry, Youk said that while there is a law requiring compulsory insurance on commercial vehicles, only 30 to 40 per cent of commercial vehicles operating in Cambodia are actually insured.

“We still have a lot of commercial vehicles operating without insurance,” he said.

Youk made the distinction in automobile insurance between criminal law and civil law.

“In terms of road traffic, if you commit an accident and you kill someone, they can charge you under the penal code.  We don’t cover for the criminal side.  We cover for civil compensation, according to the civil law and we pay a victim’s family for the funeral and the victim’s family receives the money,” he said.

One of the problems in Cambodian automobile accidents is that the police have a habit of retaining the vehicle for a long time, using the release of the vehicle as a means of extracting payment.

“In other countries the vehicle is not the guilty party,” Youk said.  “In other countries, they take pictures of the damage to the vehicle and then insurance can repair it. But in Cambodia, the police still keep the vehicle for quite a long time, and sometimes the vehicle can be spoiled,” he said.

“In many accidents, the police detain the car until our clients are not happy.  In some cases of minor accidents, the police try to keep the car, and that makes customers unhappy.  We got a lot of pressure from customers.”

Youk said he also has sympathy for poorly paid police officers who stand all day on the street corners.

Industry wide this year, Youk said there was not much loss of civil property, compared to last year.

“Last year, the losses were very high. This year, Cambodia wide, we did not have much loss. However, losses by catastrophes are not predictable. When our neighbours like Thailand, Vietnam or other countries suffer catastrophes, it affects our reinsurance prices,” he said.

As far as fire department capability in Cambodia goes, Youk said the local firefighters need more training and experience.

“They need to have more fire drills and focus on fire safety for high rise buildings.  If they are not well trained, I’m concerned about the people’s life in those buildings as well.”

Forte Insurance brought in insurance specialists from Lloyds of London to Raffles Le Royal Hotel on August 31 for a seminar to educate the general public about an insurance concept called financial life, which attracted more than 200 participants from the banking sector, microfinance and the stock exchange.

“We discussed fraud policy in the financial sector, as well as professional indemnity,” he said.

The three main topics discussed at the seminar were crime policy, professional indemnity, and insurance to protect the directors and officials of a company.

“Right now we see the financial sector has grown in such a manner that I feel that they need protection for their own balance sheet and to also give confidence to their clients,” Youk said.

He gave the example of a bank that had a fraud problem.

“Because the bank bought a fraud insurance policy, they got paid by the insurance company.  The bank’s clients now have confidence that the bank is very secure and they can trust it.”

Youk says the companies listing on the stock exchange should have insurance in order to give confidence to their investors who they expect to buy shares during the listing.

“The investor will be more confident because they have insurance policy to cover them. We are already working with some companies already which intend to list on the stock exchange,” Youk said.

He remains confident about the future of Cambodia’s insurance industry because only one or two per cent of Cambodians are presently insured, a very low percentage compared to other countries.

“We have a bigger market to grow and we’re happy that life insurance can play a very crucial role to stimulate the medical insurance.”

Youk is concerned about the speed at which human resources and the training can keep up with the growth of Cambodia’s insurance industry.

“We are very concerned that the industry has grown, but the human resources still have not caught up.  Every firm should focus on the training of the staff to catch up with the market.  For us we have good training and our staff is more qualified, but I think Forte alone is not enough. This has to be the entire industry.  People who work in insurance have to be qualified and only qualified people can offer standard service to our clients.”