Life insurance to be launched

[mrfusion]

Life insurance to be launched
http://www.phnompenhpost.com/index.p...-launched.html
CAMBODIA has struck an agreement to create the Kingdom’s first life insurance firm, a Ministry of Economy and Finance official said yesterday.

The venture will be 51 percent held by the government, with the remainder owned by a group of four private companies, said Ros Phearun, Deputy Director of the ministry’s Finance Industry Department.

“This policy is very important for our country, as it will help to ensure financial security for Cambodians and will help to develop the financial industry,” he said.

The private companies include Indonesian insurer PT Asuransi, Hong Kong-based Asia Insurance, and Thai firms Bangkok Life Insurance and Bangkok Insurance Public, said Ros Phearun.

The deal was reached on Thursday, though no date has been set to create the insurance firm, he added.

Representatives of the four firms could not be reached for comment yesterday.

Observers welcomed the firm’s creation, commenting there was a requirement for the life insurance services it would provide.

“It’s good to see the government issue the licence. Cambodians need life insurance as much as anybody else,” ACLEDA Bank Chief Executive In Channy said yesterday. “When family members who have access to loans die, they sometimes leave the family with outstanding debts. Life insurance will help to alleviate this financial burden.”

There are currently 6 insurance companies and one re-insurance company operating in the Kingdom, according to the most recent data from the General Insurance Association of Cambodia statistics.

A total of US$13.5 million in premium revenue was collected in the first half of this year, a 19 percent year-on –year increase on the $11.43 million recorded in 2010, its statistics show.

Claims also increased during the first six months compared year-on-year, hitting $30.6 million in the period in 2011, from about $4 million in the same period 2010, the data shows. Two large manufacturing factories suffered serious damage from fire in March and April.

Last week, industry insiders said they were seeing large increases in fire insurance in Cambodia driven partly in response to the two fires, as well as proof that the Kingdom’s insurance companies were able to make good on the claims.

[mrfusion]

Life insurance is a very sensitive subject everywhere when it started. But is definitely need as families of the deceased can often suffer serious financial difficulty.

Factory should consider buying life (and disability) insurance for its workers, so in the event of any misfortune, their workers are covered. And it also help kick start the industry.

[AsianDragons]

posted in wrong section

[mrfusion]

Originally Posted by AsianDragons

posted in wrong section

Sorry, I am sure SeeMacau will move it for me to the Serios Talk Section.

[Sam168]

Yeah that is really good that government push all sectors to have life insurance.
As you can see on news everyday, that are more accidents : traffic accident, construction accidents, so on.
Government encourage to have life insurance for all sectors.

[Wisarut]

^
Indeed, Life Insurance has become another form of savings and it will ensure that the hospitals will ACCEPT you if you have been injured by the serious accidents since hospital bills will be paid for sure.

Furthermore, you can use your payments of the annual life insurance premium to reduce the amount of tax you have to pay to the government but this will apply to the life insurance with the payment period at least 10 years.

For those with low income, they can pay the life insurance premium in a monthly basis but the accumulated rates will be higher compared with the annual payments.

Another insurance will be the automobile to pay to the one you have run over and to pay to you as well as the belligerent party once ther are a dispute on payment. This has become a LAW in Thailand since 1992.

However, the insurance companies MUST have sound financial managements or it will hurt those who pay a premium to insurance companies. Commercial Banks can run the insurance business or becoming the channel to pay insurance premium but Commercial Banks generally have very lousy insurance services to say the least.

[mrfusion]

Once you open the market, plenty of professional insurance company around the world will enter the market. The existing banks probably don't have the necessary experience.

There seems to be at least 2 type of insurance, one is real insurance, one is actually a saving plan and it provide a life insurance.

Car insurance already exist in Cambodia, I am not sure if it is compulsory.

We need to look at how other developed countries implement it, and develop our model.

To cover for insurance company that goes broke, (even big company can have problem), government may take out a tax/levy for all insurance premium received for safe keeping, and these can be used to cover insurance company that goes bust.

[Wisarut]

^
According to Insurance and Assurance Regulation, Insurance companies must deposite the cash at the Insurance Regulation Bureau and need to keep theri convertable assets at the certain levels ... or they will be forbidden from issuing antoehr insurance policy ...Insurance Regulation Bureau will use the deposited cash and liquidable assets to pay back to those insurance customers if the insurance business gone bust.

[mrfusion]

Has this been set up in Cambodia already?

This is the way to go, customer will need to know they are covered even if the insurance company go bust.

But this is probably not so true for saving plan type of insurance. The saving is probably not recoverable if the company goes bust.