Q&A with Sovannaphum: Insurance by Cambodians for Cambodians

May Kunmakara / Khmer Times No Comments Share:
Jan Arend Wes, CEO of Sovannaphum Life Assurance PLC. KT/Chor Sokunthea

Khmer Times’ May Kunmakara discusses the local insurance market with Jan Arend Wes, CEO of Sovannaphum Life Assurance PLC.

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KT: Please give us a brief rundown on what prompted the establishment of Sovannaphum LifeAssurance in a market which just opened its doors to life insurance and where knowledge of this service is also not very high.

Mr Arend Wes: We are a part of the Canadia Investment Group, one of the biggest and strongest financial institutions in the country. Pung Kheave Se, the chairman of Canadia Investment Holding, wanted to build up the financial group across all parts of the financial industry, beyond just banking. Naturally, life insurance is an integral part of a comprehensive portfolio for a financial institution.

There is a lot of opportunities here. At the same time, many Cambodians are under insured. Proof is everywhere. Over the last four or five years, insurance companies have entered the local market at an increasingly faster rate. It just makes sense to be a part of this buoyant market.

Likewise, we already have a solid distribution network provided by Canadia Bank, which makes reaching potential customers easier.

We have two main shareholders – Canadia Investment Holding and Muang Thai Life. The latter is the biggest life insurance company in Thailand and they have a clear ambition to build a strong presence in Asean. Cambodia is simply the next logical step in their expansion plans.

The other aspect is that there are cultural similarities between Thailand and Cambodia, and the shareholders are comfortable with each other. Muang Thai is the biggest player in Thailand and they are aspiring to be a significant Asean player as well. With both Canadia Holdings and Muang Thai Life coming together, it is an opportune moment to form a new company here.

KT: How big is the life insurance market in Cambodia and what percentage of the market does Sovannaphum Life Assurance have or targets to have by 2020?

Mr Arend Wes: We don’t have the latest data, but what I can say right now is that we are building the company and its fundamentals to make it strong. These would later translate into our overall market share. We have had a good first year and I do feel our market presence will be seen much more next year and the year after, because the fundamentals are there and we are ready for expansion.

KT: With the entry of new international life insurance companies, how has your company fared against this competition and how much of its business is reliant on support from your Thai partner?

Mr Arend Wes: I am happy to see so much competition in this fledgling market. This is just a great sign of a healthy, expanding market.

We are here for Cambodia, and not just for our international shareholders. Our investment is realistic and we don’t want to overdo things or spend money like crazy. The reason is that we want to create the best product for Cambodians and provide them with the best services available.

KT: What steps are you taking to ensure quality service and deliverables to the customers and what sets you apart from the competition?

Mr Arend Wes: Our strongest point is that we are a Cambodian company. We know what is going on in Cambodia and 99 percent of our employees are Cambodian. This shows in what we do.

We are giving excellent opportunities to Cambodians. Most companies already do that, but we are going further. If you look at my management team, we have 10 senior leaders in the organisation – and almost all of them are Cambodian. Our trump card is that we understand Cambodia better than non-Cambodian players.

Our edge is also that we have a low expense base, so we can better divert our resources into developing good products and offering them to the Cambodian people.

KT: How supportive are the partners in this business and since Canadia, a prominent bank, is one of the partners, how much multiplier effect has it had on business growth?

Mr Arend Wes: Very supportive. There is no doubt in the mind of Mr Pung, the chairman of Canadia Investment Holding, that life and general insurance need to be part of the company’s portfolio.

In terms of the multiplier effect, I do think people are beginning to understand the concept of life insurance better. We have been working hard on our branding and promoting Sovannaphum Life as part of Canadia Group. That has a multiplier effect because Canadia stands for trust and long-term commitment to the country. At the same time, Canadia also stands out as a big, supportive bank. All these augur well for Sovannaphum Life.

KT: Are existing Canadia Bank clients your main customer base?

Mr Arend Wes: That was the case, of course, in the first year, because we needed to start somewhere. Last year, our focus was more on using Canadia Bank as a point of sale for life insurance products. Now, we do it ourselves with the help of our own insurance advisors.

But moving forward, while the client base in Canadia is still our main target market, we also have Cambodia Post Bank and Funan Microfinance in our group. So we will start working with them as well.

In an emerging market, if you want to reach out, you cannot just rely on banks for your customer base because not every village has a bank or microfinance institution. For that reason we employ personal financial advisors as well.

KT: Right now, your portfolio seems heavily based on business and home protection insurance services. What percentage of your overall portfolio do these policies account for?

Mr Arend Wes: Business and home protection policies are very important for us. We have only started offering business protection very recently, however.

We are now looking into developing other products like kid’s education saving plans and loan protection products.

We are working on our fundamentals and we want to focus on that to develop more products. We have huge opportunities for that within Canadia Bank and Cambodia Post Bank. What I can say is that 2018 will be an important year for developing products in new segments of the market.

KT: How many policies for life and other sectors have been issued by the company since its inception, and what are be the major challenges you face in carrying out your business plans and strategies?

Mr Arend Wes: The big challenge right now is building up a sizeable personal financial advisor network. If a Cambodian decides to buy insurance, they will buy it from a place they trust. So at this stage, I believe that the most logical place for people to buy life insurance will be at a bank, due to the trust element. But our personal financial advisors are important and we need to focus on them as well.

They are key in helping us reach people in the provinces where banks don’t have a strong presence. As I said, banks remain the most trusted advisors in the insurance market, because personal financial advisors are a relatively new thing; they have only been around for four or five years. If we want to expand nationwide, we need to rely more on our advisors to help us reach the more remote areas of the country.

The other challenge is giving people a fair return and a fair price for their protection. We all need to understand that people trust us with their money, but they also expect protection and returns on savings. We need to make sure we do this for our valued customers.

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