Cambodia Investment Review
Cambodia’s Insurance Brokers Association (CIBA) in association with Cambodia Investment Review and B2B Cambodia, has recently held a comprehensive discussion on the prevailing trends and future growth strategies in Cambodia’s growing insurance sector. The discussion offered insights into critical aspects including the role of CIBA, brokers’ responsibilities, market dynamics, technology adoption, and future expansion tactics.
CIBA Chairman, Meas Sophat, started the discussion by highlighting the fundamental mission of the association, which centers on the universal principles that brokers work for the clients’ interests. He elaborated, “While our industry in Cambodia is relatively nascent, the CIBA already has a registration of over 15,000 brokers. At present, we contribute to around 28% of the general insurance market, a figure we aim to enhance in the foreseeable future.”
Discussing Cambodia’s strong insurance market growth, Anthony Galliano, a board member of CIBA, highlighted the remarkable increase in insurance premiums. He commented, “In 2009, annual premiums were only around $20 million. Today, the general insurance market has seen a significant escalation, crossing $132 million in gross premiums last year.”
However, Anthony pointed out that despite the impressive growth, the penetration rate, represented by the total premiums as a percentage of Cambodia’s GDP, is still less than 2%. This, he believes, underscores an enormous potential for future market expansion.
Further, he noted an even more impressive growth in the life insurance sector, a recent entrant in the market, with gross annual premiums exceeding $195 million and a robust consumer uptake.
The panelists also discussed market segmentation, where Forte, Infinity, and ASIA were identified as the market leaders in general insurance, while Prudential, Manulife, and SVL dominated the life insurance sector.
The discussion then shifted to the role of technology in the insurance industry, with Anthony acknowledging that its adoption hasn’t been as quick as anticipated. He revealed, “An online quote system he introduced in 2017, a common feature in several markets, hasn’t been as successful here.”
Sophat agreed with this observation but maintained that technology, although not capable of replacing all insurance distribution, would make personal line products more consumer-friendly.
Discussing compulsory insurance and its potential implications, Anthony pointed out that unlike other markets where insurance covering property, car, and health is mandatory, such practices are not prevalent in Cambodia. Anthony projected that enforcing compulsory insurance standards could notably elevate the overall insurance penetration rate in Cambodia.
“Here, the value in property insurance is primarily associated with the land, and health care typically operates on a pay-as-you-go system. Car insurance disputes are often resolved informally. Anthony believes that once mandatory insurance becomes a standard, it will substantially increase the overall insurance penetration rate in Cambodia,” he added.
Sophat emphasized the crucial role of regulation in creating market trust. He noted that a public perception exists where issues emerge when consumers attempt to claim, despite consistently paying their premiums. He suggested that in these situations, regulatory intervention could provide much-needed support.
“Currently, Cambodia doesn’t have standardized terms and conditions for insurance products, barring fire insurance. Therefore, the regulator has a critical role in aiding consumers to understand the contracts they are entering,” he added.
In their concluding remarks, both panelists expressed confidence in the future of Cambodia’s insurance industry. Anthony commended the regulator’s efforts, projecting continued strong growth. He lauded, “The regulator’s work has been commendable, and we anticipate strong growth to persist with the rising sophistication of products.”
Sophat reaffirmed CIBA’s commitment to bolstering the industry and articulated a vision for the future. He stated, “CIBA is poised to play a key role in expanding the market. We envision our brokers’ market share to soar from the current 28% to over 60% in the next ten years.”
Source by: cambodiainvestmentreview
