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Construction Insurance Trails Boom

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Despite strong growth in investment in the construction sector, investors, builders and developers still largely neglect insurance on projects, industry and government officials say.
 
Director and general manager of Forte Insurance Youk Chamroeunrith said that with the sector’s rapid growth there were still many risks. “People still seem to have a limited understanding about construction insurance,” he said. “But in other countries, construction insurance is seen as an important way of managing risk.”
 
“I have a problem demonstrating the risk issue to construction companies. Investors and construction companies should clearly learn about this and consider the importance of insurance.
 
“If the construction project meets a small problem, it’s okay. But if it’s a big problem or the contractor runs away, construction will get stuck.
 
“Forte has paid out millions of dollars in insurance for some construction companies. But the number of companies buying insurance is low. I hope investors, developers and construction companies will clearly understand the importance of insurance.”
 
The deputy director general of the general department of financial industry in the Ministry of Economy and Finance, Chhay Rattanak, said the insurance sector played a vital role around the world as one of the pillars of the financial system and economic development by curbing risks for industries such as construction and the and the services sector.
 
 “Last year, the insurance sector was worth $80 million,” he. “In the past five years, the sector saw an increase of 20 percent year-on-year which requires stakeholders to prepare regulations to improve the sector.
 
“With the strong growth of the construction sector, the ministry calls on construction companies as well developers to buy insurance to protect their projects. However, the number of companies buying insurance is still low.”
 
Total premiums for general insurance rose 16.4 percent last year to about $61.6 million, from $53 million in 2014, with property, fire, vehicle and medical insurance leading the way, according to the Insurance Association of Cambodia.
 
A report from the association said the fastest growing segment of insurance was property and fire with premiums rising 35.1 percent, followed by vehicle insurance, up 14.5 percent; medical insurance, up 26 percent, and personal accident insurance, up 18.8 percent from 2014.

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