The MOPF’s announcement No1/2019 officially permits companies wishing “to operate the business of insurance, underwriting agency or insurance broking with foreign investment” to open for business in the country. 

The MOPF invites interested local and foreign insurers to submit Expressions of Interest and/or Requests for Proposals to operate insurance businesses in Myanmar. The process will be facilitated by the Financial Regulatory Department. 

According to the announcement, life insurance providers will be given two options to operate. The first option allows not more than three licenses for foreign life insurers to operate as 100pc wholly owned subsidiaries. The second allows foreign life insurers with a representative office in Myanmar to form a joint venture with a local life insurer. 

Meanwhile, non-life insurance providers with representative offices in Myanmar will be allowed to form a JV with local non-life insurers. 

Local composite insurers are to operate as separate entities, which will pave a way for foreign entities to associate or partner with the local insurers. 

Since 2013, 11 local insurers have been granted licences to operate, while 14 foreign insurers have set up 30 representative offices in the country.  

The move comes a day after Myanmar Times broke news that Samsung Life Insurance, South Korea’s largest insurance company had left Myanmar last August after opening a Yangon representative office in November 2013.

Prior to the MOPF’s announcement, patience in the industry had been wearing thin, given that the authorities had repeatedly promised to open up the insurance sector since the first quarter of 2017, with no action taken until yesterday. 

“Liberalising is better as the local companies will benefit from foreign know-how and skills and develop further,” U Thaung Han, secretary of the Myanmar Insurance Association, told Myanmar Times last month.

Daw San Dar Oo, managing director of state-owned Myanma Insurance, said foreign insurance providers are keen to expand in Myanmar given that only two million out of a population of more than 50 million are insured. In Myanmar, insurance penetration is still just under 0.1pc of GDP, the lowest in the region.

According to the CBM, total gross written premiums (GWP) amounted to approximately K33.9 billion in the first quarter of 2017, with Myanma Insurance accounting for 45.5pc of the total.

Currently, fire insurance, motor insurance, group life insurance, special travel insurance, health insurance and marine cargo insurance are the more popular policies in Myanmar, according to Global World Insurance.

The move is also significant for the capital market, as insurance providers are big investors in government bonds. 

At a conference in Yangon last month, U Thant Sin, director of the Financial Regulatory Department under the MOPF, said foreign insurers can be expected to contribute capital towards buying government bonds. 

“If we allow foreign players in the market, we will be able to get the funds we need to develop the government bond market. Once an insurance company is given a licence, 30pc of their required capital should be for buying government bonds,” U Thant Sin said.

Source: https://www.mmtimes.com/news/foreign-insurance-providers-cleared-open-business-myanmar.html-0