Government Praises Insurance Industry

KHMER TIMES
SOK CHAN



Cambodia’s nascent life and health insurance industry is growing strongly as the six companies operating in the country continue to build customer confidence in their products, a senior government official said.

Speaking at an event marking the fifth anniversary of French-owned Prevoir (Kampuchea) Micro Life Insurance, Nguon Sokha, secretary of state at the Ministry of Economy and Finance, stressed insurance’s importance as Cambodia continues to develop.

“Microinsurance is still small [compared] to GDP, but it contributes to the economic growth in Cambodia and the insurance sector is the pillar of financial system that helps to enhance national economic growth,” Ms. Sokha said.

Solene Favre, chief executive officer of at Prevoir (Kampuchea), said that revenue has increased year-on-year since they began operations. They currently hold about 300,000 active policies.

“Though the microinsurance is rapidly growing in Cambodia, the knowledge of people on microinsurance is quite low as they don’t really know what the benefit of insurance is,” said Ms. Solene, adding that they were actively engaged in educating people on the potential benefits of taking out policies.

She called on the industry to simplify the products they offer in order to boost understanding of what is on offer. Compensation payments must be clearly explained, and paid quickly to further build trust, she added.

Despite the rapid growth, compared to other Asean countries, life insurance penetration remains low. Malaysian life insurance accounts account for 3.3 of GDP, while in Singapore it is 4.3 percent. In contrast, Ms. Sokha said that the contribution in Cambodia is about one percent.

Last month, life insurance company TYGi Save Death Association and a local microfinance institution – KDO Finance Plc. – reached a deal to provide life insurance to people with low income, particularly garment workers.

The life insurance service has six packages from which customers can choose ranging from $40 to $3,000 per year in a period up to 15 years, Yun Sophea, president of TYGi Save Death Association, said at the signing ceremony.

“Our main target customers are garment workers who can afford life insurance from our association,” he said. “They can pay less than $7 per month for a year to get the $80 package.”