March 14th, 2009 
Cambodia Economy The global economic crisis did not hit Cambodia’s fledgling insurance industry but the insurance sector experienced 18 percent growth in premium income last year. The insurance market size, however, has only total value of 20.5 million US dollars. It is estimated that only one and two percent of14 million of population can afford the insurance. This makes it hard to attract new foreign insurance companies to enter into the Cambodian market.
In Meatra, Head of the Financial Industry Department’s Insurance Division at the Ministry of Finance, said that the premium insurance revenues west up to 20.5 million US dollars in 2008 from $17.5 million in 2007. It increased up to 18 percent.
At the present, Cambodia has only five insurance companies- Forte Insurance, Caminco, Asia Insurance, Campubank Lonpac and Infinity Insurance. It is expected two companies to enter the market this year- one local company and other from Malaysia. Caminco Insurance – State-owned company- also plan to sell its 75 percent shares owned by the government, and then a joint venture may be formed with a Thai Insurance company and local investor.
David W Carter, chief executive officer of Infinity Insurance, was quoted by the Phnom Penh Post as saying that he expects the insurance sector to grow this year, despite the crisis. “We anticipate the insurance market to outpace Cambodia’s GDP growth over the next year. So, if GDP grows by five percent, we expect the insurance market premiums will increase by 10 percent minimum.” He added that “this is mainly due to rising demand, as more awareness towards the advantages of buying insurance grows.” He said that the discovery of oil and gas off the coast could dramatically boost the sector.
Cambodian people still is unaware of the advantages to buying insurance; most of insurance buyers are foreign investors, international non-governmental organizations. Therefore, in general, Cambodia’s insurance sector is facing the dilemma of small market size to attract new entrants.
Youk Chamroeunrith, general manager and director at Forte Insurance, said that we need to have more foreign investment first to drive premium growth, adding that the global financial crisis has put pressure on insurance growth because of declining foreign investment. He added that the premium growth already slowed down by around 2 percent in the past year.
Lack of a legislative framework and a low level of insurance awareness in the country are the biggest hurdles for insurance development in Cambodia, said Chamroeunrith.
He said that most insurance buyers are foreign investors, adding that Forte’s premium income was $8.8 million, for a 50.31 percent market share in 2007. Revenues were up about 15 percent in 2008, reported the Phnom Penh Post.
The life insurance as an important financial sector as its development can ultimately encourage public savings and drive productive investment. In the insurance sector, Cambodia has some way to go.
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