Up to eight insurance JVs expected this year
Up to eight foreign insurance service providers are expected to enter Myanmar this year in joint ventures with local providers, a senior official of the Myanmar Insurance Association says.
SIX to eight foreign insurance providers are expected to enter the Myanmar market via joint ventures with local providers this fiscal year, U Thaung Han, secretary of the Myanmar Insurance Association (MIA) and chair of CB Insurance told the Myanmar Times.
On January 2, the Ministry of Planning and Finance (MOPF) officially permitted foreign insurance providers to open for business in Myanmar.
Life insurance providers will be given two options to operate. The first option allows not more than three licenses for foreign life insurers to operate as 100 percent wholly owned subsidiaries.
The second allows foreign life insurers with a representative office in Myanmar to form a joint venture with a local life insurer. Non-life insurance providers with rep offices in Myanmar will be allowed to form a JV with local non-life insurers.
The MOPF will invite interested local and foreign insurers to submit Expressions of Interest (EOI) and/or Requests for Proposals (RFP) to operate insurance businesses in Myanmar. The process will be facilitated by the Financial Regulatory Department (FRD).
In fact, four local private insurance firms, including CB Insurance, have already completed joint ventures with foreign firms, U Thaung Han said.
“We expect to see a minimum of six and a maximum of eight joint venture insurance firms in the domestic insurance market,” he said, adding that the government’s long awaited move to liberalise the insurance sector is “excellent” for the country.
U Zaw Naing, director general of the FRD, added that the new entities are expected to launch domestically within the current fiscal year.
“Information on the EOI and RFP process will be out soon. The ownership ratio of the joint ventures between the local insurance and foreign insurance firms will also come out soon, U Zaw Naing said, adding that the government’s aim is to encourage more investments into the country.
The government in 2013 initially allowed 11 local private insurance companies to operate domestically. However, foreign insurance providers were restricted to opening representative offices only.
Currently, there are 32 representative offices of foreign insurers in Myanmar including from Singapore, Japan, Thailand, US, Hong Kong, France, UK, Malaysia, Republic of Korea, India, Germany, Taiwan, Vietnam, and Cambodia, according to the MOPF.