Dearth of investment opportunities hampering Cambodian insurers

In one ASEAN nation, a lack of investment opportunities for insurers is hampering the industry

Dearth of investment opportunities hampering Cambodian insurers

Insurance News

By Jordan Lynn

A lack of investment opportunities for insurance firms in Cambodia is hampering the industry.

With limited investment available to insurers, they are forced to rely solely on underwriting profits but industry representatives have said that if the Government provides more investable securities options it could attract untapped pools of investment.

“The government has to support the development of a diverse and significant securities market in Cambodia to provide investment options that are suitable for insurance companies seeking to diversify the investment of their capital and reserves,” said Huy Vatharo, chairman of the Insurance Association of Cambodia (IAC), according to the Phnom Penh Post.

With growth in the insurance industry throughout the ASEAN region hitting all-time highs, there are now seven local and international firms operating in Cambodia.

Vatharo said that total premiums increased fourfold in the last five years to US$113.6m last year but the amount invested in securities remains negligible.

“Cambodia’s securities market is not yet popular for insurance companies to use as an investment option,” he said.

“However, a few insurance companies have put their investment in recently listed stocks. Their investment size is not significant, but it indicates a trend that insurance companies have started to diversify their investment portfolio.”

If insurers are able to invest their money elsewhere the wider Cambodian economy would benefit alongside the insurance industry.

Robert Elliott, CEO and general manager of Manulife Cambodia, told the publication that as a long-term investment play, insurers are able to play an important role in the wider economic environment.
“Life insurance is a long-term business that plays a very important role as a great facilitator in developing capital markets such as cash, debt instruments, real estate and equity,” Elliott said.
“As the industry grows, the demand for quality assets also increases.”

Related stories:
Thailand and Cambodia sign insurance cooperation agreement
AIA opens doors in Cambodia

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