Insurance sector in Cambodia recorded 18% growth in 2008 as Cambodians have started acknowledging the significance of insurance policies.
A finance officer said that Cambodia’s fledgling insurance sector recorded a growth of 18% in 2008 despite the global downturn in the sector, as reported by skhmer.
According to Ministry of Finance, insurance premium revenue soared to $20.5 Million in 2008 against $17.5 Million in 2007. This stupendous growth in insurance premium reflects Cambodians increasing awareness about the benefits of buying insurance products, particularly automobiles and personal accidents.
Despite the economic crisis, the Cambodian insurance industry will grow or at least stabilize in the current year due to the discovery of oil and gas reserve off the coast that will boost the accidental and transportation insurance.
At present, five insurance companies are operating in Cambodia - Forte Insurance, Caminco, Asia Insurance, Campubank Lonpac and Infinity Insurance. It is expected that two new companies, one domestic and other from Malaysia, will mark their entry into the Cambodian insurance market this year.
Moreover, insurance companies in Cambodia generate bulk of insurance premium from property, motor, fire and medical business lines of the corporate sector. Individual premium contribute very small share to the insurance business.
However, it is estimated that 14 Million people (merely 1-2% of Cambodia’s total population) can afford to buy insurance products. According to Forte Insurance, the largest insurer in the country in terms of market share, majority of insurance buyers are foreign investors. The company further said that its revenue surged around 15% in 2008, while premium income stood at $8.8 Million (50.31% of total market) in 2007.
Low level of insurance awareness and lack of legislative framework are two biggest challenges in the growth of the Cambodian insurance industry. Moreover, the penetration of life insurance is very low in the country because of little knowledge about the benefits of buying insurance for protection.
According to a Research Analyst at RNCOS, “The Cambodian insurance sector has been witnessing rapid growth in premium in the recent years that largely outpaced the country’s GDP. Despite this, the market is yet to see a marked development. To drive the premium growth, industry requires more foreign investments. However, Cambodian population is comparatively young and appears to be early adopter of new and innovative insurance products.”
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