Cambodia’s insurance industry saw record growth in 2016 and was valued at $113 million, according to a report from the Insurance Association of Cambodia (IAC).
The report, released yesterday, stated that the total gross premium grew by 35.6 percent, hitting $113.6 million last year compared with $83.7 million in 2015.
“Insurance in Cambodia continues to grow year-on-year and the strong overall growth was due to increased coverage in the following areas: property and fire insurance, medical insurance, engineering insurance, personal accident insurance, and marine, aviation and transport insurance,” added the report.
IAC chairman Huy Vatharo said that the report was a good indication that Cambodia’s insurance sector will continue to grow.
“The growth of the insurance industry in Cambodia defines a better future for the Cambodian economy as the risks involved, as well as financial strains that could befall Cambodian families and businesses, are transferred to the insurance companies instead,” he said.
Mr. Vatharo said that besides general insurance, the life insurance industry has also been playing a crucial role in building a healthier financial future for Cambodian families while also driving the long-term economic development of the country.
“The total gross premium of the life insurance industry rose by 76 percent in the fourth quarter of last year compared with the same period in 2015 – up $12.3 million last year compared with $7 million the year before,” he said.
Manulife Cambodia CEO and IAC vice-chairman Robert Elliott said that the growth of life insurance in the kingdom would help Cambodians manage risk effectively and also improve the economy.
“I am proud of life insurance in Cambodia as it has been expanding to safeguard Cambodian families. More significantly, the life insurance’s first year gross premium grew by 58 percent from $15.4 million in 2015 to $24.4 million in 2016,” he said.
Youk Chamroeunrith, director general of Forte Insurance – the largest insurance provider in Cambodia with a 47 percent market share – said that Forte saw an increase of 19 percent last year, up by $33 million compared with $28 million in 2015.
He noted that the growth mostly came from insurance in the engineering, medical and real estate sectors. However, Mr. Chamroeunrith said overall insurance coverage only amounted to 0.35 percent of GDP. “That is still too low,” he added.
Cambodia’s insurance penetration rate is the lowest in ASEAN. In comparison, Malaysia’s premiums account for 3.3 percent of GDP in the life segment and 1.8 percent in the non-life segment. Singapore’s life insurance premiums are at 4.3 percent of GDP and non-life premiums stand at 1.5 percent.
Commenting on the construction sector, Mr. Chamroeunrith said that it could be a turning point for insurance. “We can see that the construction sector has been growing and that’s where we see the demand for insurance rising too.”