PHNOM PENH: Cambodia plans to introduce compulsory insurance for private vehicles, making it the last country in Asean to have such a policy.
The Ministry of Economy and Finance said the move was aimed at ensuring health and property costs for victims of road crashes were protected.
Ministry secretary of state Ros Seilava said the compulsory insurance would also be important in strengthening and expanding the social safety net system, in tandem with the government's social protections.
Reacting to the announcement, Forte Insurance group CEO Youk Chamroeunrith told The Phnom Penh Post that almost 95 per cent of countries around the world have such a policy for private vehicles.
He said the insurance sector was ready for the move, and that the policy would not only be indispensable for vehicle owners, but also in the interest of the public.
Seilava said the insurance industry had contributed much to the nation's economic growth and that the sector had grown substantially, even during the Covid-19 pandemic.
He said the Cambodian insurance sector had built financial resilience especially to issues tied to Covid-19 or climate change, which have become among the most pressing issues regionally and globally.
During the worst of the pandemic, the industry used Covid-19 insurance products as a means of managing and facilitating travel to the country, he added.
Meanwhile, Cambodia's Insurance Regulator of Cambodia (IRC) director-general Bou Chanphirou said 94 insurance institutions currently operated in Cambodia, including 18 general insurers, 14 life insurers, seven micro-insurers, one reinsurer, 18 insurance brokers, 34 corporate agents, and two loss adjusters.
The Cambodian insurance sector's gross written premiums (GWP) for 2021 amounted to US$297.6 million, up by just 9.6 per cent from a year earlier, compared to an average annual growth rate of over 23.5 per cent over the 2016-2021 period.
According to the Insurance Association of Cambodia (IAC), the national GWP surged by 35.6 per cent year-on-year to reach US$113.6 million in 2016, then rose to US$151.6 million in 2017, US$196.4 million in 2018 and US$253 million in 2019. It then slowed down to grow by just 7.31 per cent to US$271.5 million in 2020.
Chanphirou said that in 2021, there were more than one million active insurance policies that were valued at around US$204 billion in benefits, while gross claims paid over the year amounted to about US$45 million.
The Post report said that the Cambodian insurance market now had total assets of about US$948 million, including US$428 million in shareholders' funds. This has created nearly 4,000 full-time and 10,000 part-time jobs.
Based on the insurance penetration rate of about 1.11 per cent and insurance density of around US$18.75 per person in 2021, he said it showed that the growth of the Cambodian insurance sector is still relatively low compared to the region and the world.
"This indicates that Cambodia's insurance market still has more room to grow," he added.