Insurance industry starts recovery

Photo by: RICK VALENZUELA

Traffic passes a billboard late last month advertising Infinity Insurance on Norodom Boulevard in Phnom Penh. The industry is projecting double-digit growth again this year after a small contraction in 2009 due to the economic crisis.

via CAAI News Media

Monday, 15 February 2010 15:00 Nguon Sovan

Figures show 2.86pc drop last year as final two months signal vast improvement on rest of 2009

THE country's fledgling insurance industry saw revenues pick up at the end of the year to record an annualised 2.86 percent drop in premiums, officials said.

Chhay Rattanak, chairman of the General Insurance Association of Cambodia (GIAC), said that total premium revenues for 2009 fell to US$20.07 million.

“The global financial crisis is impacting on all sectors, including the insurance industry,” he said.

Nevertheless, the drop is a marked improvement on figures for the first 10 months of last year, which saw an 11.5 percent fall on premiums – to $14.16 million from $16 million compared with the same period in 2008.

“The results from December last year are better because of a new player [Cambodia-Vietnam Insurance Co], which brought premiums from risk regarding aviation and others into the market.”

He forecast that the industry is expected to expand by at least 10 percent in 2010.

“The increase is expected to follow an expected economic recovery in Cambodia,” he said, adding that new companies are likely to boost the sector.

Cambodia has six insurance companies: Forte Insurance, CAMINCO, Asia Insurance, Campubank Lonpac, Infinity Insurance, and new arrival Cambodia-Vietnam Insurance. There is also one domestic reinsurance company.

Cao Minh Son, chief executive officer of Cambodia Vietnam Insurance Co Plc (CVI), wrote in an e-mail Thursday that from mid-November until the end of the year, CVI earned around $160,000 in premiums for aviation, property, third-party liability, personal accident and motor insurance.

“This year, we are planning for a minimum target of $1 million,” he said.

Infinity Insurance Chief Executive Officer David Carter said that, despite the drop in the industry as a whole, his company saw growth of about 20 percent to slightly over $4 million last year from $3.277 million in 2008, crediting new business growth and the retention of existing customers.

Government statistics on the insurance industry will be completed in March. But Mey Vann, director of the Finance Ministry’s financial industry department, said last week that GIAC’s figures were accurate.

GIAC statistics for the amount of claims made in 2009 are not yet available. But Chhany Rattanak said that in the first 10 months of 2009, $11 million was paid out – almost 400 percent higher than the $3 million paid out in 2008. Of that, $9 million was paid in one claim by Forte Insurance to Suntex Pte Ltd for a fire that destroyed its garment factory in Phnom Penh's Dangkor district in April last year.

Domestic insurance firms – not including Asia Insurance, which declined to comment, and Cambodia-Vietnam Insurance Co, which had only just started operations – said in October that they had received six claims for damage caused by Typhoon Ketsana, which struck mostly in the northeast of the Kingdom at the end of September.