Cambodia’s growing affluence and the energetic young population is certainly a catalyst for the insurance industry. With growing awareness on the importance of insurance, new generation buyers are now investing more in life protection plans.
Cambodia’s life insurance industry is only about seven years old but the market is expanding fast as more Cambodians begin to value the importance of financial planning, especially among the growing middle class population.
About 65 per cent of Cambodia’s population is said to be under the age of 35 years old.
The Kingdom is a prosperous market for the life insurance business. Last year, new policies issued saw a strong 92 per cent jump compared to the year before and industry growth was at 60 per cent.
“New policies issued increased by 92 per cent in 2018 compared to 2017, means lot of people are better convinced and accept insurance as risk management tool ,” Sovannaphum Life Assurance Public Limited Company CEO Tan Jiak Hiang told The Post.
People are investing to whether the rising medical costs or considering it as an alternative savings for their future, and with insurance companies driving awareness campaigns on the importance of life insurance, the perception towards insurance appears to be changing quickly as well.
“The endowment policy is popular. At the end of the policy term there is a return. Those in the mid-30s prefer to buy this policy because they have stable jobs and stable income. And, when you have a stable income, you may have excess funds and you may start to look into financial planning and many people look at it [insurance] as an alternative form of saving.
The home-grown Sovannaphum Life Assurance PLC., a joint venture company between Canadia Investment Holding PLC., the holding Company of Canadia Bank, and Muang Thai Life Assurance PCL from Thailand, entered the domestic market in 2016 and is enjoying robust growth in terms of market share.
Currently, the company boasts a 16 per cent market share in the life insurance segment compared to 10 per cent in 2018.
And, for the last two consecutive years, Sovannaphum life has been reputed as one of, if not the fastest growing life insurance company in Cambodia. For the local market, the company offers a boutique of products from education saving for parents, credit life insurance, health insurance package to group employee insurance.
“Our growth rate has been significant. The strong growth was contributed by our brand awareness which is getting stronger and stronger, now more Cambodian people know about (the Smile products). Our product is value for money.
“We are also strong in bancassurance channels, we are doing significant bancassurance business through several prominent and established banks and MFIs, and that is a plus point. We have a captive market and this gives us an edge.
“In our case, Sovannaphum caters for all different market segments – depending on our customers’ level of needs and affordability,” added Tan.
Insurance companies, such as Sovannaphum, are not only offering the much-needed financial safety net for individuals but they also contribute to the vital social stability in the country.
“For individuals generally, the insurance company plays a significant role. When a person purchases a life insurance policy, it can give peace of mind from the loan liability of the borrower, and may also cater to their families’ financial security needs in the future. So the insurance company also brings social stability for the country.
Sovannaphum’s credit life insurance is a typical example, a product which helps to pay off a borrower’s outstanding debts if the borrower passes on, or is afflicted with total permanent disability.