Japan’s life insurer, Dai-ichi Life Holdings Inc. made its maiden entry into the Kingdom with plans to offer long-term financial protection and savings products for the growing Cambodian insurance market.
The company, with over a century of experience in life insurance business, established its subsidiary Dai-ichi Life Insurance (Cambodia) PLC on April 24 and teamed up with Vattanac Bank to roll out its services in the Kingdom.
“Dai-ichi Life Group has decided to enter this market to help meet the long-term insurance protection and savings needs of the Cambodians,” Dai-ichi Life Insurance (Cambodia) Plc CEO Allen Thai told The Post.
The Cambodian insurance sector, especially the life insurance segment, offers a promising opportunity for foreign companies due to the country’s steady economic growth and a rising middle class population – both impetus for the industry’s growth.
Moreover, insurance penetration among the 16 million people is relatively low, reported to be under three per cent of the Kingdom’s population.
“The Cambodian population is very young and growing fast. In the past decade Cambodia’s economic growth has been one of the fastest in Asia averaging over seven per cent annually."
“These positive economic developments have given rise to the emergence of the middle-income class whose demand for life insurance is beginning to increase,” added Thai.
According to the Insurance Association of Cambodia, 12 general insurance companies and eight life insurance companies are operating in the Kingdom as of last year.
Cambodia’s insurance sector is one of the most dynamic market in the region. It chalked up a healthy 30 per cent growth last year compared to 2017, with the sector generating over $190 million in gross premiums in 2018.
With per capita income hovering around $1,500 last year and more youth entering the job market could further stimulate demand for insurance coverage.
Dai-ichi is optimistic about its growth prospects despite being a late entrant into the local market.
“Life insurance penetration in Cambodia is very low and the demand for life insurance is rapidly rising. Coupled with Cambodia’s robust economic growth, our long Japanese heritage and high trust Cambodian consumers often attach to a Japanese brand, I am very optimistic about our growth in this expanding market in 2019 and beyond."
“Cambodia continues enjoying favourable economic and demographic fundamentals. Emergence of the middle-income class and rapidly increasing life insurance awareness will power the life insurance sector forward further. I am very optimistic about its growth,” said Thai.
Dai-ichi offers a boutique of products. It provides financial protection and savings products for individuals and families who want to save for future events, such as for their children’s higher education costs, provide income to surviving family members should the breadwinners no longer be there to care for them.
“Our products are very flexible and affordable. We distribute our life insurance products through our financial planning consultants and partner banks in Phnom Penh and key cities,” he added.
Thai said the domestic life insurance sector has been performing extremely well in the last several years. Year-on-year total premium growth was over 50 per cent in the last couple of years.
This makes Cambodia one of the fastest growing insurance markets in the region. It is now more than $100 million industry in terms of total premium generated every year.
This provides a steady flow of long-term capital which will further benefit Cambodia’s continued economic development.