Four businesses have now applied for licenses to provide insurance in Cambodia, following directives issued last year after the passage of a 1999 insurance law.
Under the Ministry of Finance directives, all insurance providers were required to apply for licenses by March 31. Companies previously operated under provisional agreements from the government.
Forte Insurance, Asia Insurance, and the state-owned Cambodia National Insurance Company, or Caminco, have all registered $3.5 million in capital and must come up with another $3.5 million in the next five years.
Indochine Insurance will be licensed as an agent for Caminco, having failed to reach the capital requirement.
Caminco was able to open under the law through the issuance of government bonds in January.
Heads of the companies said Monday, though, that Cambodia’s insurance sector, which seems weak compared to its neighbors, will require steadfast government effort to develop.
Many Cambodians are unaware of the processes—or benefits—of insurance. Compulsory laws go unenforced. And many of the large companies that are developing are allowed to insure themselves outside of the country, contrary to the law, experts said.
“The government has to take some responsibility and educate the public and the companies,” said Pascal Brandt-Gagnon, general manager of Asia Insurance.
Compared to its neighbors, Cambodia fares poorly. The per capita market for premiums is around $0.80, said Philippe Lenain, managing director of Indochine.
Malaysia, which has steadily built its insurance sector into the strongest in the region, has a market of about $145 per person in insurance premiums, he said. Vietnam, which allowed its first private insurance company to open in 1999, has a $2.10 per capita premium market.
National capacity building for regulation and enforcement, as well as a national re-insurer, must remain priorities for the government, said Charles Cheo, executive director of Forte.
“The challenge to the government is enforcement,” he said.