The insurance industry in Cambodia is expected to see good growth in future years, according to the director-general of the Insurance Regulator of Cambodia (IRC), Mr Bou Chanphirou.
In an exclusive conversation with Khmer Times, he said that the insurance industry grew by 25% over the last 10 years. In the last five years, as the insurance market expanded and became more mature, the growth rate was around 7%. He described 2023 as a tough year, during which the insurance market grew by 3.1% year on year to $342m.
“But we are already seeing signs of recovery in 2024 and we hope to grow faster,” Mr Chanphirou said.
Compulsory motor insurance
He also said that the IRC plans to implement mandatory motor third-party liability insurance in 2025. He said, “The groundwork for making motor third-party insurance mandatory was laid as early as 2014. We’ve regulations in place for it. Now, implementation is the next step.
He added that in the intervening period, the IRC is holding educational events to increase public awareness of the need for motor insurance.
Reinsurance
Mr Chanphirou said that it is no longer compulsory for insurers in the country to place risk with Cambodia Re. Previously, in the early stages of the insurance industry in Cambodia, it was mandatory for insurers to first offer to cede 20% of their risks with the reinsurer.
“Now, obviously we would like for the country’s capacity to grow and more risk to be placed within. But, we’re also aware of the realities of the insurance market. So, it’s no longer compulsory for our insurers to place risk with Cambodia Re.”
He pointed out that the shareholding structure of Cambodia Re has changed over the years. The national reinsurer was established in 2002 as a wholly state-owned enterprise and became a joint venture in 2004 between the government of Cambodia and a consortium of regional insurers. In 2019, a few local strategic shareholders were taken in, enlarging Cambodia Re’s shareholder base, both financially and strategically.