LIFE INSURANCE IN CAMBODIA MARCH 2013 Varabo& Ho October 2012
Cbodia Life Insurance Industry A $90 Mn Addressable Life Insurance Market - The life insurance industry in Cbodia is extremely new having its beginning in only 2011-2012. While during the French Colonial Period, insurance products were available in Cbodia, the general insurance industry in modern Cbodia only began to take shape in the year 2000 with the promulgalon of the Insurance Law. The establishment of the life insurance industry is seen as an important further maturalon of the financial services sector in Cbodia.. - Based on a top down methodology taking insurance penetralon rates against GDP and reviewing a spling of comparable countries, it can be eslmated that the total addressable market for insurance in Cbodia could approach US$200 million at current income levels within the next five to ten years. Assuming life insurance premiums at 45% of total premiums, there is a theorelcal addressable life insurance market of approximately US$90 million in Cbodia. Reaching the addressable market is, however, constrained by distribulon and educalon on insurance products to the general populalon. A possible acceleralng factor to the growth of life insurance coverage is represented by a possible legislalve mandate for mandatory life insurance to be provided by employers.
Life Insurers In Cbodia Big winners: Manulife and PrudenKal There are currently three major life insurers aclve in the Cbodian market: Cbodian Life Insurance, Manulife and PrudenLal. There are also two micro- insurance companies that offer low cost life insurance products, basically funeral benefits, to rural customers: Prevoir and MEADA.
Life Insurers In Cbodia Cbodia Life Insurance Company Cbodian Life Insurance Company - Cbodian Life is a joint venture formally established on January 10, 2012 by Cbodia's Ministry of Economy and Finance (51% share holder) and four partner companies: Indonesia s PT Asuransi, Hong Kong s Asia Insurance, and Thailand s Bangkok Life Assurance and Bangkok Insurance Public. It commenced operalons in May 2012. - Three types of insurance products are offered by Cbodian Life: whole life insurance, term life insurance and mortgage/loan insurance.
Life Insurers In Cbodia PrudenKal PLC - PrudenLal CorporaLon Asia, a subsidiary of the UK s largest insurer PrudenLal plc, began offering life insurance products to the Cbodia market through its wholly owned subsidiary PrudenLal Cbodia in January 2013. - Alongside the launch of its business operalons, PrudenLal Cbodia and ACLEDA Bank, the largest retail and commercial bank in Cbodia, also announced the establishment of a long- term distribulon partnership, the first of its kind in the country. - The partnership will leverage the strengths of ACLEDA Bank and PrudenLal. ACLEDA Bank offers a wide range of financial services products to a large customer base throughout Cbodia. - ACLEDA Bank will provide its customers with access to PrudenLal s products via its extensive network of 238 branches and offices nalonwide. Its customers (aged 18 to 49) will be able to access PRUmyfily, the flagship product from PrudenLal Cbodia, that offers the benefits of life insurance proteclon and guaranteed cash benefit at its maturity. - PrudenLal s sales staff will be located across the ACLEDA Bank branch network to advise customers about life insurance. PrudenLal will also extend its experlse to ACLEDA Bank in the areas of product development, insurance sales management, staff training and customer service.
Life Insurers In Cbodia Manulife - Manulife Financial officially launched its Cbodia operalons in June 2012 with an inilal investment of US$7 million with an addilonal investment of US$20 million planned over the next 5 years. It is a leading Canada- based financial services group operalng in 21 countries and territories worldwide with a corporate history of 125 years and is the world s fourth largest life insurer. - In addilon to life insurance products, the company provides asset management services to insltulonal customers worldwide as well as reinsurance solulons, specializing in property and casualty retrocession. Funds under management by Manulife Financial and its subsidiaries were US $473 billion as of September 30, 2011. - The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States. Manulife Financial CorporaLon trades under the symbol MFC on the TSX, NYSE and PSE and under 945ʹ on the SEHK. - In Cbodia, Manulife currently offers term life insurance (7, 10, or 15 years) for individuals between the ages of 20 and 55 and a savings/proteclon product for individuals between the ages of 18 and 45.
Micro- Life Insurers In Cbodia Meada Rabrong and Prevoir Micro Insurance Prevoir Kpuchea Micro- life Insurance plc - In December of 2011, Prevoir pioneered the micro- life insurance segment in Cbodia targelng the lower- income demographic by offering small life insurance coverage to MFI loan customers - Groupe PREVOIR, an independent insurance group that specializes in life insurance, was first established in France in 1910. The company operates five branches outside of France, including Portugal, Poland, Vietn, Brazil and Cbodia. Meada Rabrong - SAMIC Limited is a microfinance insltulon providing credit and savings oplons to poor and low- income Cbodians. In 2011, SAMIC developed Measure for Economic and Accelerated Development for All (MEADA) a specialized insurance product that protects the financial debts in case of death of the income earner. - As of December 2011, MEADA had rolled out a credit life insurance and insured 6,340 small business loans with 70% of eligible loan clients taking out the insurance products and a basic life insurance product (essenlal a funeral benefit) having enrolled 1,246 clients and spouses. - For 2011, MEADA earned US $58,000 from its insurance aclviles.
Life Insurance RegulaLons Key RegulaKons in Cbodia - The Insurance Division of the Financial Industry Department, a division of the Ministry of Economy and Finance (MEF) is the insurance regulator in Cbodia. Anyone carrying out insurance aclviles in Cbodia is subject to the Insurance Law (2000), the main controlling law covering insurance, and its sub- decrees. - Insurers, insurance brokers, insurance agents and loss adjusters must be licensed by the regulator. Only insurance companies licensed in Cbodia may underwrite insurance business in Cbodia. A reinsurer may operate from abroad without a license. - An insurance company needs to have a minimum capital of $7 million to be licensed in Cbodia. - Insurance companies may be 100% foreign owned.
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