Prudential Launches Life Insurance Services

Prudential Cambodia, a subsidiary of British financial services firm Prudential Plc., on Wednesday became the third company to offer life insurance services in Cambodia, a company official said yesterday.

The launch of Prudential Cambodia follows that of state-owned Cambodian Life Insurance Company and Canadian firm Manulife (Cambodia) in May and June, respectively.

Prudential Cambodia CEO Pankaj Banerjee said yesterday that the company has invested an initial $7 million in the country, the minimum required by law for life insurance firms, and expects to serve mostly middle-income customers.

“The emerging middle class is perhaps going to be the key segment,” Mr. Banerjee said. “This is the segment of the customers that over the next 10, 15, 20 years will keep growing.”

Mr. Banerjee said that as Cambodians become wealthier, the benefits of life insurance increase. “Financial protection becomes more and more relevant when your income grows,” he said. “Whenever it comes to income protection, that’s when insurance will come into a country.”

Currently, Mr. Banerjee said, there is “practically zero penetration” of the life-insurance sector in Cambodia, and little knowledge among the general public about how or why one would take out a life insurance policy.

“One of the utmost responsibilities that Prudential has is to create the right kind of consumer awareness,” he said.

In an effort to educate the general public about life insurance, Prudential Cambodia has partnered with Acleda Bank, Mr. Banerjee said. Prudential sales staff will be located in the bank’s 238 offices across the country, according to Prudential’s website.

In Channy, president and CEO of Acleda, said “a lot of advertisement, lots of information dissemination and public education” will be required of Prudential to develop a strong customer base in Cambodia, where the insurance industry makes up just 0.23 percent of the country’s gross domestic product—compared to 4 percent worldwide.

David Carter, CEO of Infinity Insurance, a local insurer, said that large international firms such as Prudential and Manulife understand the challenges of entering an emerging market like Cambodia, and are prepared to wait years to see a return on their investments.

“It’s a tough job to sell life insurance to people who don’t really understand it,” Mr. Carter said. “They’ve got to start with really basic products, because the education level just isn’t there,” he said.

And because the average income in Cambodia is lower than in developed countries, both annual premiums and possible payouts will be smaller, Mr. Carter said.

“The policies that are going to be on offer, the sums are not going to be that big,” he said.

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