Cambodia’s first insurance agency had started in 1990 by the State-owned agency – Caminco. After the 1993 national election, the insurance industry is increasing when local and foreign investors have invested in the sector during nearly 20 years. Even though, it is noticed that insurance industry still face challenges in a market where a few people understand the benefits and many cannot afford premiums.
Despite there was the global financial crisis, Cambodia’s premium insurance revenues increased 18 percent in 2008 – from US$17.5 million in 2007 up to US$20.5 million in 2008. In addition, Cambodian people have started understanding the advantage of buying personal insurance and car insurance, according to In Meatra, Head of the Financial Industry Department’s Insurance Division at the Ministry of Finance.
At the present, there are five insurance companies in Cambodia – Forte Insurance, Caminco, Asia Insurance, Campubank Lonpac and Infinity Insurance. In addition, two new companies are expected to enter the market this year – one local firm and another from Malaysia.
Although, Cambodia’s insurance market is very small in comparison with other countries because Cambodians have a little knowledge about this sector and cannot afford it as well. It is estimated that there is one and two percent amongst Cambodia’s 14 million have possibility to buy insurance.
“We know that our customers are looking to save on their expenses,” said David Carter, CEO of Infinity Insurance. “In some cases, they are cutting back the level of insurance they buy,” reported VOA Khmer.
“What can happen in a financially difficult time such as this is customers may not be careful in management of their business,” Carter said,
While the number of insurance customers is increasing- premium payments increased from $8 million in 2003 to $20 million in 2008 – only about one percent of Cambodians have it.
David W Carter, chief executive officer of Infinity Insurance was quoted by the 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,” said Carter.
“Generally, in less developed countries the proportion of people buying insurance is very low compared to the developed world,” Youk Chamroeunrith, director of Forte Insurance, Cambodia’s largest insurer, quoted by the Post as saying. He added that “Cambodians are not interested in buying insurance, and they have less knowledge about the importance of buying insurance.”
In Cambodia, life insurance is not offered by insurance companies but other service offers are insurance on automobile, property, marine cargo, personal accident and healthcares, engineering and construction and other eventualities.
The fact that people who live on less than one dollar per day cannot afford insurance.
The VOA Khmer quoted Mey Vann, Director of Financial Industry at the Ministry of Economics, as saying that his ministry is working to educate people and reform some of the insurance law, including all vehicles have insurance.