Insurance Sector in Cambodia

EXECUTIVE SUMMARY
This Report is analyzing the current development of Cambodia insurance sector, which has a very high potential growth in the future.

After several years of fragile development of insurance sector, Cambodia finally made a transition to a Free Market Economy that allowed the sustainable growth of insurance market, and new private insurer joined the sector since 2000. Today, the industry comprises of six direct writing companies, including one state-owned enterprise, and one national reinsurance company.

During the last decade, especially from 2005, the gross premium of insurance market has increased significantly with an average rate of 17.02%, from US$10.85 million in 2005 to US$24.87 million in 2010. And as the market is still quite small compared to other ASEAN countries, this growth is expected to continue soaring at a very rate in the future in line with the development of Cambodian economy because of customer’s confidence, understanding of insurance benefits, and the effectiveness of controlling technical frameworks, laws and regulations of the government aimed to preserve the benefits to insured and insurer.

Among all insurance companies in Cambodia, Forte insurance acquires the major market share followed by Infinity, Compubank Lonpac, and CAMINCO. With this regard, the growth of insurance market will mostly benefit to the leading company. Therefore, investing in such company is to get higher profit but lower risk, and PPS is here to help all investors to realize your goals.

OVERVIEW OF INSURANCE SECTOR
The development of Insurance sector in Cambodia has started in 1956 with the existence of some insurers (mostly French companies) to serve the needs in the country. Since 31 December 1963 however, the Government bought back all private shares from the insurance companies; and a national monopolized insurer, Société National d’Assurance (SNA), was established to serve the insurance market from 01 July 1964 to 17 April 19751.

After the Khmer Rouge Regime, and in line with the economic and financial reform policy, the Government had issued and adopted some necessary laws and regulations to resume the insurance sector in Cambodia. With this regard, a state-owned insurance company, Cambodian National Insurance Company (CAMINCO) was established in 1990. Since 2000 moreover, Cambodia made a transition to a Free Market Economy that allowed the growth of insurance market, and new private insurer joined the sector. Today, the insurance industry comprises of six direct writing companies and one national reinsurance company, while intermediary sector is not developed as there are only two agents and no brokers licensed. Currently, life insurance is not yet available in Cambodia, and there are 6 types of non-life insurance such as Fire, Engineering, Motor Vehicle, Marine, Health, and Miscellaneous.

Because of the favorable climate of economic growth, the Cambodia insurance sector has also grown continuously. Even though the general premium growth in 2009 slightly slowed down to a contraction of 3.18% due to the worldwide economic and financial crisis, the sector quickly recovered in 2010 by rising up 24.29% to US$24.87 million (figure 01). This growth is also expected to increase in the coming years in line with the economic development forecasted by the Ministry of Economy & Finance (MEF), because of customer’s confidence, understanding of insurance benefits and the effectiveness of controlling technical frameworks, laws and regulations of the government aimed to preserve the benefits to insured and insurer.

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