The Insurance Regulator of Cambodia (IRC) has unveiled plans to establish a National School of Insurance within the country as part of a strategic initiative to enhance insurance coverage and financial knowledge among Cambodians over the next five years. During a recent event, IRC officials highlighted the significance of education and financial awareness in increasing the country’s insurance penetration rate.
With an insurance penetration rate of 1.14 percent, calculated by comparing total premium collections to Cambodia’s Gross Domestic Product (GDP), the nation lags behind others in this sector. The year 2022 saw a growth in gross premiums to $332 million, marking an 11 percent increase from the preceding year. Despite this progress, Cambodia’s insurance market remains underdeveloped compared to other nations, posing unique challenges and opportunities for growth.
Bou Chanphirou, the Director General of IRC, emphasized the importance of collaboration with banking partners and other market participants to raise awareness and understanding of insurance’s value among the population. The industry aims to improve its outreach and inform citizens about the benefits of having insurance coverage.
At the ‘Leading the Way: The Future of Bancassurance’ event hosted by AmCham Cambodia, Chanphirou revealed that insurance density, or the amount spent on insurance per person, has seen an uptick to $20.72 in 2023 from $12.10 in 2018. This increase is part of a broader effort by the National Bank of Cambodia (NBC) to promote the growth of non-banking financial products, with targeted insurance offerings through banks playing a key role in expanding coverage.
Currently, banks are responsible for as much as 42 percent of insurance sales in Cambodia, followed by direct sales from insurers and other channels such as corporate brokers and agents. The government has set ambitious targets to achieve an insurance penetration rate of 5.5 percent and an insurance density of $135 by 2030, focusing on critical areas such as motor and health insurance.
The IRC plans to introduce a comprehensive policy framework to support the development and distribution of new insurance products, particularly in priority sectors like agriculture and natural disaster insurance. Special emphasis will be placed on micro-insurance products tailored for women and other vulnerable groups.
Acknowledging the crucial role of professional training in the industry’s advancement, the IRC aims to launch the National School of Insurance between 2025 and 2027, with prospects for further expansion post-2029. This initiative is part of a broader strategy to enhance consumer protection and market conduct oversight, including the establishment of dispute resolution mechanisms and sanctions for insurers who fail to meet market-conduct standards.
Furthermore, the IRC is committed to fostering a culture of self-regulation within the industry by forming an Association of Insurance Brokers and other specific market participant associations. Efforts to improve education and financial literacy through workshops and public awareness programs are also in the pipeline, highlighting the IRC’s comprehensive approach to bolstering Cambodia’s insurance sector.
