Insurance Challenges Ahead As Companies Await Licenses

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.

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