Harrison White

American Chamber of Commerce ‘Future of the Insurance Industry’ has put a spotlight on the amazing development of the sector over the last 20 years as well as the opportunities for even more rapid growth utilizing digital technology to achieve a planned 5.5% of insurance penetration rate with $135 for insurance density in the year 2030.

In an exclusive gala dinner and networking event that was hosted at Rosewood in Phnom Penh over 150 stakeholders from Cambodia’s insurance sector and general business community gathered with support from Platinum Sponsor AIA Insurance and Silver Sponsor Etiqa General Insurance.

The next phase of scaling up the industry

AmCham President Anthony Galliano opened the event by commenting that when he first arrived in Cambodia in 2008, the industry had only six insurance companies, five general insurers, and one reinsurer, there were just two agents and not one broker.

“The regulator was passive and the industry relied on legacy insurance laws. It took time to take off, and it finally has, the insurance industry is on the map. So again, congratulations to Your Excellency Bou Chanphirou for being a key part of the success of the industry,” Galliano said.

To read more about Affinity Star Insurance Brokers’ aim to modernize insurance in Cambodia click here.

“The next phase of scaling up may lie with the consumer, not only in stimulating buying, but also providing access to insurance products in rural areas where 75% of the population still lives. As employees demand more benefits, hopefully, the corporate sector will respond by providing health, accident, and disability insurance,” he added.

According to Galliano there will be a future shift away from how insurance products are offered and marketed in traditional ways, to gaining traction with online and point-of-sales channels he believes that everyone sees the potential and advantages of digital technology. 

“We have all benefitted from digital banking, we may call it internet banking, but in fact it is digital. The question is how the insurance industry will adapt,” he said.

A 5.5% insurance penetration rate by 2030

H.E. Bou Chanphirou, Director General Of the Insurance Regulator Of Cambodia opened his keynote speech by praising the strong leadership of Prime Minister Hun Sen stating that Cambodia’s macroeconomic stability has been strengthened and promoted through the implementation of different policy measures.

“In the last decade, Cambodia’s insurance market has been dynamic and fast growing. The market size has increased by about 20% on average per annum over the last five years. Even though Cambodia faced serious COVID-19 economic concerns in 2020 and 2021, Cambodia’s insurance market still gained positive growth of about 8% in 2020 and 10% in 2021,” H.E. Bou Chanphirou said.

To read CIR Leader Talks with Dr. Sok Siphana on the importance of health insurance in Cambodia click here.

To date, there is a total of 94 insurance institutions operating in Cambodia with gross premiums at $300 million from approximately one million policies insuring $205 billion. While gross claims incurred were approximately $39 million and gross claim paid was around $46 million. The industry employs nearly 4,000 full-time and over 10,000 part-time staff.

“As we are well aware that Cambodia’s insurance penetration is still very low compared to the average insurance penetration rate in the ASEAN region, it accounts for just slightly above 1% of the Kingdom’s GDP with insurance density at $18.75 per capita in 2021,” H.E. Bou Chanphirou said.

“Having said that, we fully understand the challenges ahead of us and commit ourselves as reflected in our “Strategic Development Plan for Insurance Sector 2021-2030” to achieve 5.5% of insurance penetration rate with $135 for insurance density in the year 2030,” he added.

Moderated by Anthony Galliano the expert panel included:

• Dr. Hor Sovathana, Insurance Regulator of Cambodia
• Youk Chamroeunrith, Forte Insurance (Cambodia)
• Andrew Loh, AIA Cambodia
• Chanmakara Bun, Etiqa Life Insurance Cambodia Plc.
• Meas Sopht, Insurance Broker Association

Reflecting on the regulator’s long-term strategic direction Galliano asked what the industry should prepare for under the Cambodia Strategic Development Plan for Insurance Sector 2021-2030.

Dr. Hor Sovathana, Deputy Director General of the Insurance Regulator of Cambodia said her team developed its decade-long strategic plan splitting it into three-time phases and focused on institutional, technical, and operational capabilities adding the Cambodian government has made digitalization a key focus with insurance being no exception.

“The blueprint has been created to ensure a strong, sustainable, and competitive regulated insurance market and to become a new emerging vibrant pillar of the financial sector in supporting the economic growth of Cambodia,” Dr. Hor Sovathana said.

“In regards to the development of the capital markets and fund management of the ever-increasing premiums will the regulator plan for more financial-related savings products we believe that for the moment it will be the more traditional insurance products that are sold in Cambodia albeit via increasingly digital delivery,” she added.

20 years of change for the industry

Youk Chamroeunrith, Chief Executive Officer at Forte Insurance (Cambodia) reflected that when he started his career in 1995 his first policy was worth $57 explaining at the time it was a very difficult market to operate in adding Forte entered the Cambodian market during this time because of the opportunities it presented.

With over 20 years in the business, Forte has developed strong partnerships with hospitals and medical centers. As of today, Forte has over 75,000 partnerships with hospitals and medical centers worldwide.

“While looking forward to the next 20 plus years I believe Cambodia will continue to increase its overall policy levels more in line with regional trends which is insurance is between 5% to 10% of GDP in countries like Thailand and Singapore respectively,” he added.

To read more about Forte and the potential for compulsory automobile insurance click here.

Andrew Loh, Chief Executive Officer at the life insurance provider AIA Cambodia commented on the relatively new life insurance industry which was only stipulated into Cambodia law in 2012 explaining that AIA Cambodia wanted to be an active member in the industry.

AIA aims to meet the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients.

“As a major player in the international life insurance sector, we bring strong experience into Cambodia’s developing life insurance market. In Cambodia, the penetration is very low for life insurance. AIA Cambodian only entered the market in 2017 so there can be a startup-like feeling working in the sector,” he added.

Creating different value propositions

Referencing a recent Earnest and Young study Galliano said the global insurance sector will need to create different value propositions focused on health and financial wellbeing while mixing their distribution channels and that the winners would be those who embrace digitalization and offer personalized services.

Chanmakara Bun Etiqa Life Insurance Cambodia Plc answered that for Etiaqa future customer demand was moving toward the digitalization of services and that bringing more product offerings to market in a faster period was paramount.

Etiqa’s mission is to offer balanced protection and wellness plans for all segments of the Cambodian insurance market that are delivered through its digital channels and bank partner Maybank Cambodia.

“It was important that as an industry we were able to truly understand the Cambodian market needs and tailor any products accordingly. In addition, it was incumbent on the regulators to work with the sector and allow us to bring these products to market as fast as possible,” she added.

To read more about current ‘bancassurance’ regulations click here.

Speaking from an insurance broker’s point of view Meas Sophat of the Insurance Broker Association commented that the association needed more distributors of insurance products to be certified as well as having both the policyholders and underwriters best intentions.

“If we can offer, sell and service insurance products to our customers professionally and ethically then the industry will first gain more awareness but then, more importantly, trust in turn we will grow the industry as a result,” Meas Sophat said.