Wednesday, 25 February 2009

Despite Rapid Premium Growth, Cambodia's Insurance Sector Has a Long Way to Go
February 24, 2009

(BestWire Services Via Acquire Media NewsEdge) Cambodia's insurance industry has seen rapid premium growth in recent years, which largely outpaced the country's gross domestic product, yet the market has not seen marked development.

In the past year, Cambodia's insurance industry experienced 18% growth in premium income, in comparison with an estimated GPD growth of 6.8%. However, the insurance market size has only a total value of US$20.5 million. This makes it hard to attract new players, particularly foreign insurance companies, which could play a critical role in developing the market, said Youk Chamroeunrith, general manager and director at Forte Insurance, a leading local insurance company.

"We need to have more foreign investment first to drive premium growth," said Chamroeunrith in an interview. However, the global financial crisis has put pressure on insurance growth because of declining foreign investment. Chamroeunrith said premium growth already slowed down by about 2% in the past year.

Lack of a legislative framework and a low level of insurance awareness in the country are the biggest hurdles for insurance development in Cambodia, said Chamroeunrith. The country now only has nonlife insurance operators and product offerings are limited to commercial business lines for corporate clients.

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