Myanmar discovering insurance safety net

YANGON: It was only when Aye Aye Nge’s pharmacy burned down for the second time that she thought about taking out insurance, a novelty in impoverished Myanmar where most people either can’t afford to buy premiums or don’t trust those selling them.

The two blazes – one in 2010 and then in January this year – gutted much of the bustling Mingalar market in downtown Yangon, taking with it two shops and valuable stock belonging to the 73-year-old.

“I thought there couldn’t be a fire accident again after the first one,” she said from her tiny new store on the fourth floor of a nearby building where the market has moved.

“I am going to buy insurance,” she added. “I must do it. I have lost

I have lost everything twice already and am afraid of losing it all again. Aya Aye e

(everything) twice already and am afraid of losing it all again.”

Decades of brutal, corrupt and economically inept military rule left Myanmar’s people with a deep distrust of state-run institutions.

For 50 years until 2013, the only insurance company in the country was a state-run monopoly after the junta closed down all rivals.

But the country’s dramatic transformation from military to civilianrule, capped by last November’s elections that spurred Aung San Suu Kyi’s party to power, has begun to shift the fortunes of the economy. The values and aspirations of Myanmar’s people are also changing.

Insurance firms are gambling that as people get richer, they eventually will do more to protect themselves – and their assets – in a country prone to natural disasters and with near non-existent health and safety standards.

Investment has flooded in and the country’s largest city Yangon is now filled with cranes and cars plying traffic choked streets.

But according to the government, just 5% of the country’s 600,000 drivers have any sort of insurance.

Likewise, few of the shop owners around the bustling Shwe Mingalar market have taken out protection measures, despite losing thousands of dollars in the recent fires.

After decades of junta rule, insurance is not a priority to the public.

“They are not interested at all,” admits Htay Paing, the deputy managing director of Grand Guardian Insurance Public, one of a host of new insurance companies.

Management consulting giant McKinsey believes the economy, if managed properly, could quadruple from US$45bil (RM182bil) in 2010 to US$200bil (RM810bil) by 2030.

That should be a boon to insurers.