First life insurance company launches in Cambodia

The Kingdom’s first life insurance company, Cambodian Life, launched yesterday, courting a market almost entirely unfamiliar with the service.

Industry insiders said demand for the products would need time to grow.

The Ministry of Economy and Finance signed agreements in August with PT Asuransi Central Asia, Asian Insurance Co ltd, Bangkok Life Assurance Plc and Bangkok Insurance Co ltd to provide the services.

The company is 51 per cent government owned, the remaining ownership divided between the four insurance companies.

Chairman of General Insurance Association of Cambodia (GIAC), Chhay Rattanak, welcomed the launch, but said it would take time for the company to become profitable.

“It is a starting point. This is another step in the development of the sector and works in cohesion with many other countries in the region. I think there will be some other companies that will open soon,” he said. “I think it will take between two and three years to become successful. Success is not possible in one year because more time is needed to convince the people.”

He added that other countries in the region such as Vietnam also started with general insurance and followed with life insurance, which had taken around three years to become profitable.

The establishment of Cambodian Life in the Kingdom would develop confidence in the market and eventually attract other life insurance companies to Cambodia, said Aun Pornmoniroth, secretary of state at the Ministry of Economy and Finance.

“The establishment of Cambodian Life will create diversity in financial services for people to manage unforeseen risks in the future” he said. “Cambodia Life will operate throughout the country to provide life insurance products that will be private and voluntary and will assist in creating a social safety net.”

Cambodian Life has done its due diligence on the market, according to In Meatra, the company’s director general.

He said the company had been conducting feasibility studies into what services would be offered since 2004, and that the decision was carefully considered.

“After our feasibility studies, we had a fantastic response from businessmen and even from people who work within the informal economy,” he said. “If the response had not been so positive, we would not have proceeded with launching the business. I think these products will serve a need of the people, as the economy is growing and these services are coming into demand.”

The company will provide three main services, In Meatra said: term life insurance, whole life insurance and mortgage insurance.

The price for term and whole life insurance starts from US$5,000 while mortgage insurance.

Sourced:Phnom Penh Post