Insurance market sees positive growth despite worldwide challenges
THE insurance sector in Cambodia experienced positive growth in the first quarter of this year, according to the Insurance Association of Cambodia (IAC). Total premiums received during this period amounted to approximately $96 million, marking a 5.5 per cent increase compared to the same quarter in 2022.
Huy Vatharo, chairman of the IAC, highlighted the global economic challenges that have arisen since the end of 2022. Inflation has been a major concern, affecting both the world and Cambodia. Furthermore, rising interest rates in the banking system are impacting the insurance sector, both within ASEAN and globally. Experts agree these two factors will undoubtedly influence the insurance landscape.
“While the first quarter of 2023 demonstrated positive market growth in terms of a 5.5 per cent increase in premiums, the pace of growth has slightly decelerated compared to the first quarter of 2022. This slowdown can be attributed to the ongoing global crisis,” Vatharo explained.
The association received approximately $96 million in premiums during the first quarter, encompassing general insurance, life insurance, and micro insurance. General insurance witnessed the highest growth at seven per cent, while life insurance grew by 3.3 per cent. Additionally, micro insurance rebounded by 43 per cent after experiencing a setback due to the Covid-19
crisis in the years 2021-2022.
Vatharo noted that despite the increase in premiums, there has been a significant rise in claims, indicating that insurers have already incurred risks. In the first quarter alone, insurers in Cambodia paid out over $12 million in claims, representing a 24 per cent increase over the same period in 2022.
Similarly, Youk Chamroeunrith, CEO of Forte Insurance Group, said the growth rate of the insurance sector in Cambodia during the first quarter of 2023 was slower compared to previous quarters. Typically, each quarter exhibits an increase of approximately 10 to 15 per cent.
“The first quarter’s growth was impeded by ongoing global crises, including Covid-19 cases, conflicts, inflation and other global issues. If these global crises persist, the second quarter may be even more challenging than the first,” Chamroeunrith cautioned.