Insurance company Grand China Life Insurance signed a memorandum of understanding (MoU) with Chief (Cambodia) Commercial Bank Plc to further contribute to the development of the insurance sector in the Kingdom.
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The bank-insurance partnership aims to establish a legal relationship between both entities that will comply under regulations sanctioned by the relevant regulatory authorities.
The MoU will see the bank refer clients to the suitable insurance products and services offered by the Grand China Life Insurance. The insurance company will be offering a diverse range of insurance services in various sectors, be it loans or even education.
CEO of Chief Commercial Bank Soeung Morarith says the insurance industry in the Kingdom has been recording progressive growth over the years and partnerships such as the one formed between the bank and insurance company will fuel the growth.
“The commercial bank is very pleased to cooperate with Grand China Life Insurance to contribute to the development of the Cambodian insurance industry,” he said.
Soeung said Cambodians are enjoying higher incomes, allowing them to spend more on products and services, including insurance.
“Cambodia’s national income was only $288 in 2000, but this increased to $830 by 2010 and reached $1,548 in 2018,” he said.
Soeung said that, with revised laws and responsible regulatory agencies, Cambodians now have a deeper understanding of the importance of insurance.
Grand China Life Insurance CEO Yu Li Qun said the bank will advise clients on suitable insurance products.
Grand China Life Insurance obtained a licence from the Ministry of Finance in 2017 and began operations in March 2018. Within two years of business, the insurance company’s number of customers reached 2,055.
The company has Macao and mainland China investors as well as a technical team composed of professionals from the former largest insurance company in China.
Cambodia’s insurance sector underwent significant growth with premiums seeing a 14 percent increase in the first half of the year, according to reports. Additionally, the sector is set to play a bigger role for the country’s economic development. Chairman of the Insurance Association of Cambodia (IAC) Huy Vatharo said the total gross premiums in the insurance industry saw an increase on average of 35 percent a year in the last five years.
The Ministry of Economy and Finance this year pointed out that from January to June, gross premiums in general insurance reached $39.7 million, which was a rise of 14.7 percent in comparison with the same period in 2018.
The increase in value was attributed to the minimal risk posed because insurance supports trade and further encourages investment while companies would see it as a way to promote financial stability.
A report by the International Monetary Fund shows the the insurance sector’s contribution to Cambodia’s financial assets was $42 billion (0.5 percent of all financial assets) and 0.8 percent of the gross domestic product (GDP) of $24.57 billion last year.
According to a Ministry of Economy and Finance report, there were 13 general insurance companies, 11 life insurers and seven micro-insurance firms in the Kingdom.
J.P. Morgan Asset Management’s Alexander Treves, quoted by media company CNBC, mentioned that the Southeast Asia insurance industry holds a lot of opportunity and is set for “really attractive” growth.
He further added, low-income countries are set to see a high margin of growth in the insurance industry in the next couple of years.
Mobile payment apps in the Kingdom have also started to provide insurance services by insurance companies, making it convenient for clients to access their products.