In lieu of an abstract, here is a brief excerpt of the content:

153 Chapter 5 Insurance Sector 5.1. Insurance Market—An Overview The insurance industry in Cambodia is of recent origin and evolving. The pricing and risk structure of the industry is still not clearly understood and there are calls for relaxation of some of the regulatory requirements. 5.1.1. Insurance Industry Regulation The Insurance industry in Cambodia is governed by the Insurance Law that came into force in June 2000. The Insurance Law is supplemented by the Sub-decree enacted on 22 October 2001, which prescribe the details of insurance contract. The Law on Insurance and Sub-decree require each insurance company (life and non-life) to have registered capital in Riel at least equivalent to 5,000,000 SDR or US$ 7 million. In 2002, the MEF took into account the relatively small size of the insurance industry and the scarcity of capital and accorded it greater flexibility in terms of capital requirement whereby the companies will be given a grace period of up to five years to comply with the capital requirements. Terms and condition to get insurance license, the company is required to: • Pay a deposit of 10% of registered capital of US$7 million into the deposit account of MEF at the National Bank of Cambodia. This is to protect the public from possible risks caused by the bankruptcy of the insurance company; • Pay a deposit of 50% of registered capital of US$7 million at any account of commercial bank recognized by the National Bank of Cambodia. This deposit is considered as a solvency margin, which an insurance company is required to maintain; Supervision of insurance companies is being carried out by the Department of Financial Industry of the MEF. The process includes collection of statistics from insurance 154 companies, desk analysis of the data submitted, a follow-up on findings, as well as on-site inspections by the regulators. Under the present system, companies submit complete financial statements, accompanied by an auditor’s certificate, once each year. Additional statistical information is collected for interim periods. In support of the audited financial statements, companies also complete a special prescribed form that was developed by a working group of ASEAN insurance supervisors. 5.1.2. Insurance Market in Cambodia Growth of the industry in terms of value insured has been steady (11 to 42% per annum in the last 7 years). Gross insurance premium increased by more than seven folds from a low level of US$2.3 million in 2000 to US$17.5 million in 2007. However, the industry offers a limited range of insurance products. A drastic increase in 2007 of $5.4 million in premium over 2006 was due to Oil & Gas industry insurance. Figure 5.1. Gross insurance premium in Cambodia Source: MEF As of December 2007, there are 5 insurance companies operating in Cambodia– Forte, Asia Insurance, Caminco, Infinity Insurance, and Long Pac Insurance - and one reinsurance company – Cambodia Re. 2.3 3.6 4.6 8.8 10.1 10.8 12.1 17.5 0 2 4 6 8 10 12 14 16 18 20 2000 2001 2002 2003 2004 2005 2006 2007 $ Million [18.118.150.80] Project MUSE (2024-04-26 10:26 GMT) 155 Figure 5.2. Insurance Market Share by Company Source: MEF Forte Insurance dominates the market, accounting for 50% of the insurance market share; followed by Asia Insurance, which represents 35% of the market. Other companies are fighting for the pie, such as Caminco (10% of market share); Campu Bank Lonpac (3%) and Infinity (2%). Some 10% of the insurance premium is ceded by the five insurance companies to Cambodia Re. Table 5.1. Insurance companies by line of business Source: MEF Line of Business ASIA CAMINCO LONPAC FORTE INFINITY Total Auto 801,256 1,074,475 112,117 950,955 85,977 3,024,781 Fire 959,899 306,444 185,078 2,641,500 39,309 4,132,231 Marine 171,126 19,947 9,180 223,677 1,683 425,614 Engineering 1,383,762 71,980 35,263 335,744 2,813 1,829,562 WC 171,053 13,295 - 5,424 - 189,772 PA 371,047 135,138 28,537 1,076,925 73,327 1,684,975 H&S 290,629 16,386 5,483 826,713 82,310 1,221,521 Miscellaneous 1,937,933 65,678 143,730 2,740,587 97,363 4,985,291 TOTAL 6,086,705 1,704,695 519,389 8,801...

Share