China to Enter Insurance Market

KHMER TIMES
MAY KUNMAKARA

A Chinese man walks past an insurance advertisement in northern Beijing. Chinese insurance companies are keen to set up branches in Cambodia. Reuters

China Export and Credit Insurance Corporation (Sinosure) is in talks with officials to enter the country’s insurance market, the Ministry of Economy and Finance announced yesterday.

Wang Yi, chairman of the Chinese state-owned Sinosure’s board of directors, met with Finance Minister Aun Pornmoniroth last week to discuss the idea, the ministry said in a statement.

“With the strong friendship between Cambodia and China ‒ which can be called a strategic partnership ‒ Sinosure is thinking of offering their credit insurance here in order to boost investment in Cambodia,” Mr. Wang was quoted as saying.

Sinosure specializes in offering credit insurance, which protects exporters when buyers fail to pay for deliveries. According to its website, it has “supported export, domestic trade and investment with a total value of $2.1 trillion” since it was founded in 2001.

Youk Chamroeunrith, managing director at Forte Insurance (Cambodia) described the news of Sinosure’s interest in Cambodia as positive.
“I think that it will give more benefits to our local business people who send merchandise abroad, as it will provide another option for them to access credit without needing to rely on banks and providing collateral.”

While his company has offered credit insurance for the last three years, he said that the option was still not known widely, and that

Sinosure’s entrance into the market would boost its popularity.

“It is new to Cambodians. Once Sinosure comes here, it will positively affect local [insurance] companies, as the number of businesses trading with China and Chinese investment volume is big,” Mr. Chamroeunrith added.

Presently, Cambodia has seven general insurance companies and three life insurance companies. The Insurance Association of Cambodia (IAC) recently reported an increase in total gross premiums by 37 percent in the first half of 2016, at $56 million. This came from a 16.2 percent increase in general insurance, and 113.2 percent growth in life insurance.

“These results show greater customer confidence in the insurance sector in the country,” said IAC chairman Huy Vatharo.