Hoping to capitalise on stronger demand for the product across the nation, Forte Insurance is ready to diversify into life insurance after having obtained its license in February.
Speaking to Khmer Times, managing director Youk Chamroeunrith said the time is ripe for the move, with industry penetration still at less than 1 percent.
Mr Chamroeunrith said Forte, who has been in the industry for more than 20 years, decided to diversify into life insurance after realising that the market is still relatively small compared to overall population size.
“We know the market very well after 20 years. That’s why we decided to move into the life insurance business,” he said.
“The life insurance market has huge potential for growth because the current penetration is less than 1 percent. We are not too late into this segment yet, and we see great opportunities for growth,” Mr Chamroeunrith said, adding that the company will start selling life insurance policies around May.
As of last year, there were 12 general insurers and eight life insurance companies operating in the country, according to a report from the Insurance Association of Cambodia (IAC).
Between 2013 and 2018, the annual compound average growth rate was 15.7 percent for general insurance and 120.5 percent for life insurance, AIC said in its latest report released in late March.
The total gross premium in the insurance industry rose 30 percent last year, mostly driven by life insurance sales, according to AIC. It reached $196.4 million in 2018, compared with $151.6 million the previous year.
Sales from general insurance grew 15 percent, while life insurance expanded 50.6 percent.
Robert Elliott, Manulife Cambodia CEO and general manager, said more and more Cambodians are taking up life insurance policies to secure the financial future of their families.
“In 2018 alone the life insurance sector paid out over $2.3 million in claims to families of policyholders in Cambodia, against $1 million paid out in 2017,” Mr Elliott said.
“I’m very excited to witness the trust and support that Cambodian families have put into life insurance although the industry just started off in 2012.”
According to Mr Chamroeunrith, life insurance companies in Cambodia focus mainly on bigger cities. He said his company will also be present in rural areas.
“We do see demand in rural areas so we have created products that are affordable to people in the provinces. With our broad network of agents and offices, we do believe people in rural areas will buy our family insurance policies to protect their families.
“We are also targeting garment workers. They now have the National Social Security Fund for medical treatment. Our products can complement this fund at very affordable prices,” he added.