It has been nearly a year since BIMA launched the first mobile-delivered life insurance product in the Cambodian market. Smart Life Insurance, underwritten by BIMA and available to Smart Axiata subscribers, now financially secures more than 75,000 Cambodians. The company also offers personal accident insurance to individuals and SMEs through cash payment.
Amritha Mani, Country Manager, Milvik (Cambodia) MicroInsurance Plc (BIMA), spoke to Khmer Times about the microinsurance provider’s specialized products, and her outlook for the local insurance market.
KT: What type of insurance is seeing the most demand in Cambodia, and do you expect this to change?
Ms. Mani: The mass market has shown a clear demand for life, accident and health insurance. The industry is still at a nascent stage here. As Cambodians become more aware of insurance, demand will grow for more complex forms of personal insurance like healthcare or education endowments. BIMA will adapt our product portfolio accordingly to meet these needs.
Most of our current customer base is in Phnom Penh, but we are expanding to at least six other provinces this year.
KT: Do Cambodians understand the value of insurance?
Ms. Mani: Our customers definitely do – 100 percent of our sales are made after a one-to-one interaction with the customer. We place a strong emphasis on customer education through peer-to-peer education via our salespersons, implementing community engagement education initiatives, and engaging with regulatory and media debate to increase financial awareness around the power of insurance.
KT: How successful have you been in carving out a share of the local insurance market?
Ms. Mani: The insurance market in Cambodia is undergoing rapid development, with multiple players offering consumers real choice. The Ministry of Economy and Finance’s efforts to ensure fair pricing have also helped to build the insurance market. In partnership with Smart Axiata, BIMA launched the first ever mobile-delivered life insurance product in Cambodia – Smart Life Insurance – in Q3 2014. Despite a healthily competitive market, in just eight months, BIMA and Smart covered over 75,000 subscribers, and we are currently growing each month by more than 10,000 subscribers. To place this in context, we estimate that Smart Life Insurance now accounts for about 40-50 percent of the total individual life insurance policies in Cambodia.
KT: What has been the response to BIMA’s mobile-delivered insurance?
Ms. Mani: In general, the response to Smart Life has been very positive. Our customers really appreciate the simplicity of the process, from the paperless registration to easy payment options. Our claimants especially appreciate the speed with which we process claims, typically in just seven days. Our customer feedback shows that people believe in our product – 87 percent of our survey respondents stated that they trusted us – and that we are different from other insurance providers.
KT: What mobile phone platforms are available for this service?
Ms. Mani: Smart Life Insurance works with all types of phones – low-end feature phones to smartphones. All you need is a Smart SIM card. Mobile penetration in Cambodia is quite high – a recent study estimates that above 93 percent of Cambodians have their own phone and for subscriptions, estimates are at 126 percent, both above global averages.We use our own unique platform, which is fully integrated with Smart ensuring safe and secure access for customers.
KT: How do you assess risk in the different markets where your products compete?
Ms. Mani: BIMA works with experienced actuaries who assess the risk and determine premiums payable according to available country-specific data. Therefore, we only bear calculated risks that we have the capacity for as a company.
KT: What are the premiums for your various products?
Ms. Mani: For our Smart Life Insurance product, we offer two levels of coverage – our customers pay a premium of $0.80/month for life insurance coverage of $1,000, and $1.60/month for coverage of $2,000. BIMA Personal Accident insurance is sold in prepaid packages using cash; much like the way airtime credit is bought. The premiums breakdown is: $3 for three months coverage; $6 for six months (plus 1 free month); and $12 for one year (plus three free months).
KT: Do you work with employers as well as individuals?
Ms. Mani: In addition to individuals, we do work with a growing number of employers, mostly small and medium-sized enterprises. We see huge potential in both channels.
KT: What is the biggest obstacle to selling insurance in Cambodia?
Ms. Mani: The low level of insurance awareness and understanding is our biggest obstacle. That is why we place a very strong emphasis on educating our customers about our products and the benefits accrued to them and their family. We collaborate regularly with the Ministry of Economy and Finance and other industry players to improve the situation at hand. We are also in talks to set up a Microinsurance Working Group with other microinsurance companies to support consumer education on a national scale. We see tackling the challenge of financial awareness as a collective effort and are committed to leading the way on driving positive developments in the Cambodian insurance industry.
KT: What is the outlook for the microinsurance market in Cambodia?
Ms. Mani: The microinsurance industry in Cambodia has tremendous growth potential. It is still in a relatively early stage of development, and to the Ministry of Economy and Finance’s credit, there is a very progressive regulatory framework in place to promote growth. From our experience in other countries, we can see that the role of regulators in creating the right environment for providers like BIMA to innovate and apply new methods of distribution is key to success. Cambodia has the right environment. We are, therefore, very optimistic about the market’s prospects and are committed to continuing our investments into Cambodia so as to contribute to the sector’s development.