The total amount of claims paid out by local insurance firms during the first nine months of the year have tripled to more than $11 million compared to the same period in 2011.
According to data from the General Insurance Association of Cambodia (GIAC), paid claims grew 153 percent to reach $11.48 million between January and September. The rise in claims has resulted in the cost of premiums going up in order to cover the risk now associated with fire.
“Most of the claims being paid are to flood and factory fire-related incidents from last year so the insurance companies here are beginning to increase premium rates,” said Oeurn Chanvisoth, secretary of GIAC, adding that about $3 million of the payments this year were distributed to small factories damaged during last year’s flooding between September and November.
Most of the remaining claims were made to two garment factories that burned down during the first half of 2011. Due to the enormous payouts that resulted from the two fires, insurers have increased their premiums for fire coverage anywhere between 25 and 100 percent.
Gross revenues generated in the insurance sector grew 27.7 percent to $26.13 million during the first nine months of 2012 compared to the same period the year before. Corporate health insurance premiums increased 24.93 percent to $2.17 million, while motor insurance premiums remained the second largest insurance plan behind fire, growing 23.9 percent to $3.75 million through September.
David Carter, CEO of Infinity Insurance, said that because home insurance is not mandatory, less than 1 percent of residential properties in Cambodia actually have fire insurance.
“There are just not many households that have some form of insurance in Cambodia,” he said.
