Cambodia’s nascent life insurance sector is expected to reach maturity
By Philip Heijmans
While ‘sweet-spot’ markets such as Indonesia and Singapore are fuelling the growth of Asia’s life insurance sector, Cambodia has been slower out of the starting blocks. In a country where the majority of the 15-million-strong population does not have a bank account, much less a financial portfolio, the year-old life insurance sector is prioritising education over profit.
“The Cambodian market is absolutely nascent,” said Pankaj Banerjee, general manager of Prudential Cambodia, which rolled out an extensive marketing campaign aiming to inform Cambodians about life insurance. “We believe our current task is to create the right kind of consumer awareness with regard to the life insurance product. It is like building a strong platform on which a sustainable life insurance market can be built. Life insurance is a long term business.”
Building solid foundations, Prudential spent two years researching market behaviour in Cambodia. “The product types have a very strong linage to what stage of development the life insurance industry is at in a particular country. Cambodia is in the formative stages of the life insurance industry and we believe that the product we have offered is the relevant and right product for the needs of the local people here,” he said. Banerjee is referring to the company’s first offered product,
which gives customers return payment in the event that a policy reaches maturity. Prudential Cambodia, a subsidiary of UK-based insurance giant Prudential PLC, launched in January following the entry of state-owned Cambodian Life Insurance Company and Canadian firm Manulife last year.
Although the logistics of developing a sustainable marketplace for life insurance in Cambodia are quite complex, the reasons for pioneering it are easier to understand. Economic growth has been consistently high over the past decade and GDP per capita is about $1,000, Banerjee said.
“Cambodia has a young population and practically no life insurance,” he added. “It has all the ingredients of having good life insurance potential in the long term, similar to any emerging market when they started.”