[PHNOM PENH POST]
Although private insurers hope to capitalise on Cambodia’s untapped
rural insurance market, some insiders say the industry lacks regulation
and may outprice the Kingdom’s poor.
Fewer than three per cent of rural Cambodians have insurance, Ministry of Economy and Finance data shows.
Micro-insurers, who offer low yearly premiums to rural residents, say the gap in market penetration would attract investment.
“We
see a lot of potential for micro-insurance in rural areas. It’s an
untapped market,” Ngeth Chou, a representative of Kampuchea Micro Life
Insurance, said yesterday at a United Nations Development Program
workshop on micro-finance.
“If we have one million clients and collect 12 or 15 per cent, it is good. It is a big market.”
Kampuchea
Micro Life Insurance, which will partner with a local micro-financer,
hoped to launch next month, Ngeth Chou said, although he declined to
give a figure for the company’s yearly premium.
There was more to
micro-insurance than business interest, the UNDP said. The practice
provided relief for low-income households by increasing their capacity
to cope with sudden hardship caused by death, illness or sudden loss of
property, it said.
“Micro-insurance decides whether children stay
in school,” Mayur Ankolekar, a representative with the United Nations
Capital Development Fund, said. He added that crises in rural families
often resulted in children being pulled from school.
Until
recently, micro-insurance projects had operated as disparate “pilot”
programs, Bou Chanphirou, deputy director of the Ministry of Economy and
Finance’s Financial Industry Department, told the workshop.
The
industry lacked the regulatory framework and quarterly reports needed to
assess the fiscal viability of insurance decisions, and had only begun
issuing licences to micro-insurers in June, Bou Chanphirou said.
“I
am not sure the private sector can sell to rural people,” said Dann
Chhing, a project manager at non-profit Community Based Health
Insurance, which is overseen by Cambodia’s Department of Health.
Built-in
operational costs in private businesses would be passed on to
consumers, ultimately resulting in higher premiums, Dann Chhing said.
He said government efforts to insure Cambodia’s rural population focused too much on private insurers.
Dann Chhing said his program offered yearly premiums at US$2.50.
Although
the government issued licences, permanent regulation was still void
pending the approval of a law on insurance, Bou Chanpirou said.
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