British Prudential, Japanese Dai-ichi Life, Hong Kong AIA, US Chubb and Canadian Manulife have been permitted to issue life insurance policies in Myanmar with their fully-owned subsidiary, more than half a year after the five insurers were granted provisional licences.

The approval marked Myanmar’s first-ever licencing to foreign fully-owned life insurers.

The Department also granted licences to three life and three non-life joint ventures between foreign and local firms. Three JVs for non-life insurance are between AYA Myanmar General Insurance and Sompo Japan Nipponkoa Insurance; Grand Guardian General Insurance and Tokio Marine & Nichido Fire Insurance; and IKBZ Insurance and Mitsui Sumitomo Insurance. Another three life JVs are between Capital Life Insurance and Taiyo Life Insurance; Citizen Business Insurance and Thai Life Insurance; and Grand Guardian Life Insurance and Nippon Life Insurance.

Insurance liberalisation is a flagship reform of Daw Aung San Suu Kyi’s government, albeit one tarnished by repeated delays, executives say. Her administration had initially committed to opening up the insurance market in the first quarter of 2017 and pressure was building for the ministry to follow through the pledge.

The finance ministry announced it would grant up to three life insurance licences to foreign companies a day after The Myanmar Times on January 1 revealed that Samsung Life Insurance had shut down its Myanmar subsidiary. In April, it awarded provisional licences to five instead.

Despite the delays, international insurers remain keen to tap into a market where current insurance penetration is among the lowest in the world.

Local insurer IKBZ Insurance, which has formed a joint venture with Mitsui Sumitomo Insurance Group, released a report in July showing that less than 4 percent of the population have any sort of insurance coverage. The report also indicated that the industry has the potential to grow into a K4 trillion market in 10 years.

Insurance in Myanmar, historically monopolised by the state firm, was opened up to local private operators in 2013, with 11 Myanmar licenced firms currently operating. More than a dozen foreign insurers have set up representative offices in Yangon.

The government has also approved six joint-venture (JV) proposals between foreign and local partners.

Three joint ventures for non-life insurance are between AYA Myanmar General Insurance and Tokyo-based Sompo Japan Nipponkoa Insurance; Grand Guardian General Insurance Co and Tokyo-based Tokio Marine & Nichido Fire Insurance; and IKBZ Insurance and Mitsui Sumitomo Insurance.

And another three life insurance JVs are between Capital Life Insurance and Tokyo-based Taiyo Life Insurance Co; Citizen Business Insurance and Bangkok-based Thai Life Insurance; and Grand Guardian Life Insurance Co and Osaka-based Nippon Life Insurance. 

The Financial Regulatory Department (FRD), under the Ministry of Planning and Finance,  authored a proposed Insurance Business Law which is currently under public consultation. As reported by The Myanmar Times, the draft legislation as it stands will exempt the insurance market from the Competition Law.

Under the new law, state-owned Myanma Insurance is also exempted from provisions regulating governance, liquidation and licencing.

Source: https://www.mmtimes.com/news/myanmar-awards-insurance-licences-five-foreign-providers-six-joint-ventures.html