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Cambodia: Gross insurance premiums grow by 10.2% in 2021
The gross premiums from insurance in the country, including life and general, grew by 10.2 percent in 2021 compared to the previous year, according to the Financial Stability Report, released by the National Bank of Cambodia, indicating a growing awareness among the members of the public about the importance of insurance as a hedge against everyday risks and unforeseen events in life.
The report said the gross insurance premiums increased to 1.2 trillion riels last year. Total claims paid too increased by 12.1 percent to 164.7 billion, while the claim ratio (the percentage of insurance premiums paid relative to insurance premiums earned) increased from 13.6 percent in 2020 to 13.8 percent in 2021.
Premiums earned from the sale of life insurance increased by 11.8 percent to 693.7 billion riels, which was mainly driven by endowment policies contributing 4.2 percent of the total growth and group life insurance accounting for 3.9 percent of the total growth.
Endowment policies covered the largest share of gross premiums for life insurance, accounting for 79.4 percent of total life premiums, followed by group products with 12.5 percent and term life with 5.3 percent.
Furthermore, the number of new business policies increased by 3.8 percent from 133,648 in 2020 to 138,662 policies in 2021 and the renewal of policies increased 8.9% from 342, 322 to 372,938 for the same period.
The claim ratio increased from 4.5% to 6.3% as the claims paid in life insurance increased by 54.6% to 43.4 billion riels.
General insurance premiums increased by 8.2% to 501.5 billion riels, mainly contributed by medical insurances with 5.4% of total growth, miscellaneous insurances with 0.9% and auto insurances with 0.8%. Property insurance with 33.1% accounted for the largest share of general insurance in the country, followed by medical insurance with 22.1% and auto insurance with 16.6%.
While the claim ratio declined from 25.6% in 2020 to 24.2% in 2021, the claims paid for general insurance increased by 2% from 118 billion riels to 121.3 billion for the same period.
Despite the growth in gross premiums, the contribution of the insurance sector to the country’s Gross Domestic Product (GDP) remained low. Huy Vatharo, president of Insurance Association of Cambodia (IAC), said recently that the sector represented 1.1% of GDP in 2021 — still far from the goal for 2030.
It is an indicator that the gap in risk protection is still big, with a good chunk of the population remaining vulnerable to financial impacts when unexpected events occur such as property damages.
“Insurance companies mostly depend on conventional distribution networks such as agents, banks, brokers and staff,” Vatharo said, while addressing a workshop on digitisation last week, adding that digitisation of insurance will help assess risks more effectively, design more options for customers and create wider channels for them to receive insurance services.
Source: https://www.khmertimeskh.com/501098523/gross-insurance-premiums-grow-by-10-2-in-2021/