Life insurance gallops ahead in Kingdom
Cambodia’s burgeoning insurance industry is accelerating at a healthy pace, and nowhere is this more visible than the life insurance market.
Life insurance, which only entered the market five years ago, has experienced substantial growth with more than $1 billion of coverage issued in the first half of 2017, according to a recent report by the Insurance Association of Cambodia (IAC).
Cambodia’s insurance industry now boasts six life insurers, and as the market continues to grow, new entrants are moving into the Kingdom with Bangkok Life Assurance (Cambodia) Plc and Hong Kong-based pan-Asian insurer AIA setting up local operations in May this year.
Robert Elliott, CEO and General Manager of Manulife Cambodia, said life insurance was a long-term business that played an important role as a great facilitator in developing the capital markets such as cash, debt instruments, real estate and equity.
“The continuous growth of the life insurance industry reflects positively on the financial well-being of Cambodian families as well as the country’s economy over the long term,” he said.
Elliott partly attributed the flourishing life insurance market to what he sees as a growing public awareness and trust in the Kingdom’s financial institutions, adding that life insurance was an unknown concept to many Cambodians when Manulife first started operations in 2012.
“We started off by introducing the concept of long-term financial planning to Cambodian families through our public education seminars which more than 100,000 Cambodians have attended,” Elliott continued.
“We also expanded our flagship branch offices to three key provinces: Siem Reap, Battambang and Kampong Cham, to move closer to more customers.”
The message about the benefits of life insurance in Cambodia is spreading swiftly.
Pov Leakhena, a Phnom Penh-based journalist, said she purchased life insurance in 2016 after friends and relatives informed her of its advantages.
“I decided to buy a 15-year life insurance package for $10,000 because my work is very dangerous,” she said.
However, not everyone is familiar with the concept of life insurance.
“I don’t have any plans to buy life insurance as I’m not sure of its benefits,” Sar Pisey, a staff member at the Royal University of Phnom Penh, said. However, she added that she would investigate life insurance more closely if she had her own family.
“I rarely get information related to the benefits of life insurance and sometimes there’s a lot of criticism that makes me unconfident about it,” Pisey said.
Elliott said that while life insurance uptake was growing, as a sector, it remains underrepresented in Cambodia’s economy.
Life insurance accounted for 0.22 percent of gross domestic product in the kingdom in 2016, while it makes up between three and four percent of the economies of other ASEAN countries.
Elliott added that because the industry is still new in Cambodia, its regulation is still evolving and developing.
“The regulators understand that in the future, the life insurance industry will be a key pillar in the financial sector,” he said.
“Together with the other life insurance companies, we are working closely with the regulators to promote the industry and to allow the life insurers to reach out to more customers with the right products and services.”