Insurance premiums swell 10.7% to $332M in 2022
Insurance premiums swell 10.7% to $332M in 2022
The Cambodian insurance sector’s gross written premiums (GWP) for 2022 amounted to $331.866 million, up by 10.68 per cent from $299.835 million a year earlier, according to an Insurance Regulator of Cambodia (IRC) report.
However, this increase falls far short of the 23.5 per cent 2016-2021 compound annual growth rate (CAGR) for the market, as indicated by Insurance Association of Cambodia (IAC) data, in a slowdown that industry players have pinned on shifts in spending patterns associated with the Ukraine crisis and inflationary pressures.
Last year’s life, general and micro insurance premiums came to $193.809 million, $132.341 million, and $5.716 million, respectively, up 12.60 per cent, 7.09 per cent and 38.36 per cent over 2021, the report said.
Total gross claim payments were to the tune of $46.592 million, up 2.16 per cent year-on-year, with general insurance accounting for the most at $31.481 million, up 5.97 per cent, followed by life ($14.199 million; down 6.73%) and micro ($912,401; up 35.57%).
Total assets in the insurance industry stood at $976.987 million, up 14.85 per cent year-on-year, with life insurance representing the lion’s share at $662.763 million, up 20.12 per cent, followed by general ($308.977 million; up 5.23%) and micro ($5.247 million; down 0.08%).
The industry’s growth is being driven by 18 general insurers, 14 life insurers, seven micro-insurance companies and a reinsurer.
Youk Chamroeunrith, group CEO of Forte, Cambodia’s largest general insurer, blamed the last year’s relatively slow GWP growth rate – which IRC data show was an increase from 9.87 per cent in 2021 – on global economic uncertainty stemming from the prolonged Covid-19 crisis.
He told The Post on February 28 that although Forte’s GWPs grew by more than 10 per cent last year, the firm did feel the impact from inflation’s effects on people’s income and spending, compounded by an increase in overseas partners’ reinsurance rates that were ostensibly prompted by concerns around economic uncertainty.
Long-term goals
Last year, IRC director-general Bou Chanphirou assured attendees at an event that the Cambodian insurance market was still growing fairly rapidly despite Covid-19, at an average annual rate of about 25 per cent, although slowing down to eight per cent in 2020 to reach $270 million.
The IRC recently launched a 2021-2030 insurance sector development strategic plan, setting out a roadmap for the agency in the short-, medium- and long-term, he revealed.
The framework of the short-term 2021-2023 strategy defines an insurance distribution system with a particular focus on the promotion of product sales through banking and financial institutions, in arrangements known as bancassurance. These are typically divided into two approaches: the referral and direct sales models, he explained.
According to Chanphirou, the ratio of national GWP to gross domestic product (GDP) is roughly 1.1 per cent. For comparison, this proportion is four-to-five per cent in neighbouring countries, and seven-to-eight per cent in developed economies, as noted by IAC president Huy Vatharo in June.
Vatharo commented to The Post on February 28 that the insurance market has been gradually expanding, commensurately with economic growth, as public perception of the industry improves.
Many insurance companies have been expanding their services and networks, with a focus on accessibility and explaining the benefits of the financial protections and risk mitigation arrangements that they offer, he said, underscoring that the industry has paid out considerable amounts in flood claims.
