Shift in Kingdom’s life insurance as players drive the industry forward
The Covid-19 pandemic revealed two profound changes in the life insurance segment – growing positive perception among consumers towards insurance and insurers abandoning traditional sales channels to leap into the digital space and improve delivery.
While the unprecedented pandemic strained public health services, destroyed livelihoods and businesses, changed lifestyles and pummelled economies across the globe, the Kingdom’s life insurance industry was relatively unscathed.
The Insurance Regulator of Cambodia’s (IRC) impressive figures speak volumes of the industry’s survival and performance, though still at a nascent stage, with the value of premiums in 2021 touching $293 million, a 9.5 per cent rise year-on-year.
According to the IRC, the gross premium of the general insurance market amounted to $123 million – a 7.4 per cent jump compared to 2020 – while life insurance premiums stood at $170 million, up 11 per cent – impressive figures during a gloomy pandemic period in which many other sectors suffered.
Established insurers like Etiqa Life Insurance, Sovannaphum Life Assurance and GC Life Insurance have taken the right approach and are expecting good business after weathering the pandemic that pinched business growth.
“The life insurance market in Cambodia has so much potential,” said Etiqa CEO Hong Vuthy.
The industry’s growth is being driven by 18 general insurers, 14 life insurers, seven micro-insurance companies and a reinsurance firm, reaching out to roughly 16 million Cambodians.
The pandemic is forcing people to rethink ways to manage healthcare, thus raising recognition of life insurance, say industry observers.
Health insurance and life coverage is helping to cushion the high costs of medical expenses, especially in private hospitals, providing relief to those who are financially vulnerable.
The growing demand for life insurance is also being fuelled by rising awareness among the public.
Insurance companies in the Kingdom in recent years have constantly underscored the importance of insurance – through extensive educational and community campaigns – which has helped drive the message that insurance coverage is a long-term health security, contributing to the sector’s growth.
Sovannaphum Life CEO Loke Kah Meng said: “Cambodians are now becoming more aware of the benefits of life insurance as part of financial protection for their family.”
Pushing product innovation
As public perceptions have changed, insurers too have been quick keeping pace with the changing trend.
The insurance sector landscape is transforming since the onset of Covid-19, which forced insurers to reset their business strategies as demand for life insurance grew.
Life insurers who traditionally relied on labour-intensive business quickly shifted to digital platforms to continue serving their clients efficiently and remotely.
Virtual meetings, the wide use of Chatbots – a digital interaction facility – uninterrupted services and faster claims processing, for instance, are changing how insurance companies operate.
These moves have redefined the direction of the industry, particularly in Cambodia, where it is considered a sunrise sector as less than 10 per cent of the population are insured.
Companies are focusing on product innovation, rolling out innovative insurance solutions to meet ever-changing customer needs and designing customer-centric products.
“We can see that Cambodian women are contributing more to the country, society and to their families,” said GC Life Insurance CEO Michael Tee.
By to meet specific markets, investing heavily in digital platforms to be more effective and reskilling their workforce to serve clients better in the challenging environment, insurers in the Kingdom are constantly driving the industry forward.