The fledgling insurance industry in the Kingdom continues to undergo remarkable growth, with premiums growing by more than 14 percent in the first half of the year, according to insiders.
Speaking at a workshop on the insurance industry yesterday, Huy Vatharo, chairman of the Insurance Association of Cambodia (IAC), said the market is growing rapidly and playing a bigger role every year in the country’s economic development.
“As a result, total gross premiums in the insurance industry have increased on average 35 percent a year for the last five years,” he said.
“This growth has not happened by chance. It is the result of the Ministry of Economy and Finance’s successful implementation of its policy and strategy,” he said.
From January to June, gross premiums in general insurance reached $49.3 million, a rise of 14.7 percent compared with the same period last year, according to Mey Vann, director-general of the Ministry of Economy and Finance, who also spoke at the event.
Life insurance premiums hit $66.3 million, an increase of 55.3 percent, he pointed out.
IAC’s Mr Vatharo said insurance supports trade and encourages investment and lending because it minimises risks. He believes insurance promotes financial stability for companies and the individual.
“These contributions have been seen in the current development of the insurance market in Cambodia, with constantly increasing demand and supply,” Mr Vatharo said.
Cambodia has 13 general insurance companies, 11 life insurers, and 7 micro-insurance firms, according to a report from the Ministry of Economy and Finance.
Kim Tol Am, CEO of BIMA Cambodia, told Khmer Times yesterday that business has been good since entering the local market in 2014.
“Our gross premiums and the number of active customers have been growing consistently every year,” she said
BIMA Cambodia, a micro-insurer, offers life and personal accident insurance to customers living on less than $10 a day. Monthly premiums in the Kingdom start as low as $1 per month
Ms Tol Am said the company has more than 500,000 customers and has already paid more than $1 million in claims.
The International Monetary Fund (IMF) puts the insurance sector’s contribution to Cambodia’s gross domestic product (GDP) of $24.5 billion at 0.8 percent. The life insurance segment contributed 0.3 percent of GDP last year.
The Asean Investment Report 2019, released last week, said FDI in the Kingdom was dominated by manufacturing and services, particularly finance and insurance. Services accounted for 79 percent of all FDI in the country.
Both Mr Vann and Mr Vatharo said there is plenty of room for growth and expected more insurance firms to enter the market in upcoming years.
The main challenge the industry faces is a lack of human capital, they said.
“More human resources are needed for the industry to sustain this growth. We need different skills in the insurance value chain,” Mr Vatharo said.
“Building our human capital is a priority for our organisation. We continue working hard, with events such as today’s workshop, to contribute to the development of human resources in the industry.”