Compulsory vehicle insurance on the cards
Compulsory vehicle insurance on the cards
The government plans to introduce compulsory insurance for private vehicles to make sure that health and property costs for victims of road crashes are protected, according to Ministry of Economy and Finance secretary of state Ros Seilava. This would make Cambodia the last country in ASEAN to have such a policy.
Speaking at an event in the capital marking Cambodia’s Insurance Day, on July 25, Seilava said compulsory insurance would be important in “strengthening and expanding the social safety net system” in tandem with the government’s social protections.
Forte Insurance group CEO Youk Chamroeunrith welcomed the move, telling The Post on July 25 that “almost 95 per cent of countries around the world” have such a policy for private vehicles.
He said the insurance sector was “ready” for the move, although it would “need to expand to get closer to the customers”, and added that the policy would not only be indispensable for vehicle owners, but also “in the interest of the public”.
Seilava lauded the insurance industry and its contributions to economic growth, noting that the sector has grown substantially, even during the Covid-19 crisis.
He said the insurance sector has built financial resilience in the Kingdom to both natural and non-natural hazards, especially those tied to Covid-19 or climate change, which have become among the most pressing issues regionally and globally.
During the worst of the pandemic, the industry used Covid-19 insurance products as a means of managing and facilitating travel to the Kingdom, he added.
Speaking at the event, Insurance Regulator of Cambodia (IRC) director-general Bou Chanphirou shared a range of statistics covering the insurance industry.
He said 94 insurance institutions currently operate in Cambodia, including 18 general insurers, 14 life insurers, seven micro-insurers, one reinsurer, 18 insurance brokers, 34 corporate agents, and two loss adjusters.
The Cambodian insurance sector’s gross written premiums (GWP) for 2021 amounted to $297.6 million, up by just 9.6 per cent from a year earlier, compared to an average annual growth rate of over 23.5 per cent over 2016-2021, according to the Insurance Association of Cambodia (IAC).
For reference, national GWP surged by 35.6 per cent year-on-year to reach $113.6 million in 2016, then rose to $151.6 million in 2017, $196.4 million in 2018 and $253 million in 2019, before slowing to grow by just 7.31 per cent to $271.5 million in 2020, IAC figures show.
Chanphirou added that in 2021, there were “more than one million” active insurance policies valued at around $204 billion in benefits, while gross claims paid over the year amounted to about $45 million.
The Cambodian insurance market now has total assets of about $948 million, including $428 million in shareholders’ funds, and has created nearly 4,000 full-time and 10,000 part-time jobs.
“Based on the insurance penetration rate of about 1.11 per cent and insurance density of around $18.75 per person in 2021, it clearly shows that the growth of the Cambodian insurance sector is still relatively low compared to the region and the world, which indicates that Cambodia’s insurance market still has more room to grow,” he added.
