MINISTRY OF ECONOMY AND FINANCE
Key Issues in Licensing and Supervision of
Microinsurance in Cambodia
18-20 September 2013...
CONTENT
A. Country Overview
B. Insurance Market In Cambodia
C. Microinsurance Development
D. Financial Sector Development
...
A. Country Overview
3
Financial Industry Department
Insurance Division
A. Country Overview
4
Financial Industry Department
Insurance Division
Population: 14.7M (MEF, 2013)
Population in Phnom P...
A. Country Overview
5
Financial Industry Department
Insurance Division
INTEREST RATE ON DEPOSITS ( in January 2013)
Deposi...
B. Insurance Market in
Cambodia
6
Financial Industry Department
Insurance Division
B. Insurance Market in Cambodia
7
Financial Industry Department
Insurance Division
2005 2006 2007 2008 2009 2010 2011 2012...
8
Financial Industry Department
Insurance Division
B. Insurance Market in Cambodia
2005 2006 2007 2008 2009 2010 2011 2012...
Types of
Company
General
Insurer Life
Insurer
Reinsurer MI
NGOs
Pilot
Scheme
Broker Agent Total
Private
Company
5 2 1 6 1 ...
10
Financial Industry Department
Insurance Division
C. Microinsurance Development
In Cambodia
C. Microisnurance Development
11
Financial Industry Department
Insurance Division
 There are 74% of population which live...
Financial Industry Department
Insurance Division 12
CMK 2010 2011 2012
Clients 1,291 2,566 3,666
Saving (USD) 1,099,120 2,...
C. Microisnurance Development
In 2011, MEF issue a temporary license related to microinurance
that distinguished :
1. CBHI...
C. Microisnurance Development
Financial Industry Department Insurance
Division
14
C. Microisnurance Development
Financial Industry Department Insurance
Division
15
$105,036
$36,911 $27,978
$436
$27,640
$1...
D. Financial Sector Development
Strategy 2011-2020
Financial Industry Department Insurance
Division
16
The current insurance industry and legal
frameworks are developed under the financial
sector development strategy (FSDS)....
Development Policy
Area
Short -Term
Target 2011-2014
Medium -Term
Target 2014-2017
Long-Term
Target 2017-2020
Legal and re...
E. Key Issues in Licensing and Supervision
of Microinsurance
Financial Industry Department
Insurance Division 19
E. Key Issues inLicensing and Supervision of
Microinsurance
In 2011, MEF issue circular on Issuance of Temporary License f...
E. Key Issues in Licensing and Supervision of
Microinsurance
All microinsurer and CBHI have to comply with :
1/ Fit and Pr...
Challenges
 Inadequate legal frame work and market infrastructure
 Shortages of skilled workers, education and public aw...
E. key Issues in Licensing and Supervision of
Microinsurance
WAYS FORWARD: POTENTIAL FOR REPLICATION AND IMPLEMENTAION
 I...
Financial Industry Department
Insurance Division 24
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Key issues in the licensing and supervision of microinsurance in Cambodia

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This presentation was delivered by Mr Mey Vann (Director at Financial Industry Department, Cambodia) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines).

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Key issues in the licensing and supervision of microinsurance in Cambodia

  1. 1. MINISTRY OF ECONOMY AND FINANCE Key Issues in Licensing and Supervision of Microinsurance in Cambodia 18-20 September 2013, Makati City KINGDOM OF CAMBODIA Nation - Religion - King MEY VANN Director of Financial Industry Department Ministry of Economy and Finance meyvann@live.com 1
  2. 2. CONTENT A. Country Overview B. Insurance Market In Cambodia C. Microinsurance Development D. Financial Sector Development Strategy 2011-2020 E. Key Issues in Licensing and Supervision of Microinsurance 2 Financial Industry Department Insurance Division
  3. 3. A. Country Overview 3 Financial Industry Department Insurance Division
  4. 4. A. Country Overview 4 Financial Industry Department Insurance Division Population: 14.7M (MEF, 2013) Population in Phnom Penh: 2,009,264 Area: 181,035 sq km (69,898 sq miles) GDP: 15,191M USD(MEF, 2013) GDP per capita: 1,036 USD (MEF, 2013) GDC Growth rate within 10 years
  5. 5. A. Country Overview 5 Financial Industry Department Insurance Division INTEREST RATE ON DEPOSITS ( in January 2013) Deposit in Riel (%) Deposit in USD (%) Deposit in Other Foreign Currency (%) Saving Fixed Saving Fixed Saving Fixed 1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M. 1.13 2.46 3.3 4.06 4.86 0.81 1.85 2.5 3.25 4.04 0.58 3.31 3.08 3.33 3.65 INTEREST RATE ON LOAN ( in January, 2013) Loan in Riel (%) Loan in USD (%) Loan in Other Foreign Currency (%) 1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M. 13.95 13.95 13.95 14.26 13.34 12.37 12.87 13.05 11.75 8.72 10.38 10.41
  6. 6. B. Insurance Market in Cambodia 6 Financial Industry Department Insurance Division
  7. 7. B. Insurance Market in Cambodia 7 Financial Industry Department Insurance Division 2005 2006 2007 2008 2009 2010 2011 2012 Pernetration Rate 0.17% 0.17% 0.20% 0.20% 0.19% 0.21% 0.23% 0.26% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% Insurance Penetration Rate 2005-2012
  8. 8. 8 Financial Industry Department Insurance Division B. Insurance Market in Cambodia 2005 2006 2007 2008 2009 2010 2011 2012 Premium $10,847,914 $12,128,944 $17,493,747 $20,671,279 $20,012,934 $24,755,038 $30,221,375 $35,962,796 $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 Premium Growth 2005-2012 in Cambodia Microinsurance Aug 2011 Life insurance May 2012
  9. 9. Types of Company General Insurer Life Insurer Reinsurer MI NGOs Pilot Scheme Broker Agent Total Private Company 5 2 1 6 1 3 18 Joint Venture 1 1 1 3 Total 6 3 1 1 6 1 3 21 9 Financial Industry Department Insurance Division Number of insurance companies and Distribution channels as at August 2013 B. Insurance Market in Cambodia
  10. 10. 10 Financial Industry Department Insurance Division C. Microinsurance Development In Cambodia
  11. 11. C. Microisnurance Development 11 Financial Industry Department Insurance Division  There are 74% of population which live in rural area  There are 70 of MFIs in Cambodia as at January 2013 which are :  37 licenses and  33 certificate (NGOs) included the C.M.K is Credit Mutuel  Loan grew from 2002 to 2010 at USD %51 millionin and USD$439 respectively. Number of MFI borrowers increased from 330,000 to 1.02million between the same period.
  12. 12. Financial Industry Department Insurance Division 12 CMK 2010 2011 2012 Clients 1,291 2,566 3,666 Saving (USD) 1,099,120 2,510,177 4,831,322 Credit (USD) 567,562 1,301,714 2,137,211 C. Microisnurance Development
  13. 13. C. Microisnurance Development In 2011, MEF issue a temporary license related to microinurance that distinguished : 1. CBHI which is known as MHI (for non profit) : until now there are 6NGOs 1- HIP/ SKY was launch in 2003 2-CHC was launch in 2012 3-Other 4NGOs ( CAAFW, BFH, RACHA, CHHRA) 2. Micro insurance in Cambodia ( for Profit) : Prevoir (PKMI) was launch since 2011 Financial Industry Department Insurance Division 13
  14. 14. C. Microisnurance Development Financial Industry Department Insurance Division 14
  15. 15. C. Microisnurance Development Financial Industry Department Insurance Division 15 $105,036 $36,911 $27,978 $436 $27,640 $105,472 $64,551 $27,978 $51,324 $20,493 $6,684.19 $80,096 $52,611 $100,208.50 $(25,948) $(8,553) $(78,915) -40% -20% 0% 20% 40% 60% 80% 100% Profit and Loss of MHI and Microinsurance as at June 2013 Premium Collect Other/ Donation Total Income Claim Expense Admin cost Profit / (Loss) SKY PREVOIR CHC SKY PREVOIR CHC SKY PREVOIR CHC Micro Health Insurance Microinsurance Business
  16. 16. D. Financial Sector Development Strategy 2011-2020 Financial Industry Department Insurance Division 16
  17. 17. The current insurance industry and legal frameworks are developed under the financial sector development strategy (FSDS). The strategy were updated three times since 2001. The recent updated strategy (FSDS 2011-2020) was issued by Royal Government of Cambodia (RGC) on November 25, 2011. 17 Financial Industry Department Insurance Division D. Financial Sector Development Strategy 2011-2020
  18. 18. Development Policy Area Short -Term Target 2011-2014 Medium -Term Target 2014-2017 Long-Term Target 2017-2020 Legal and regulatory framework -Develop legal framework for life insurance and Microinsurance -licensing Life insurance and Microinsurance business. -Establish a supervisory body for microinsurance Review insurance regulations to align with the level of market development and consideration to apply to Based Capital (RBC) Enlarge microinsurance coverage to the need of the poor people. Development of private voluntary pension -Develop a legal and regulatory framework for private voluntary pension. - Establishment private pension supervisory body - Introduction of private voluntary pension - Initiate training programs to public and private academic institutions. Enlarge pension coverage to the need of the poor people. 18Financial Industry Department Insurance Division D. Financial Sector Development Strategy 2011-2020
  19. 19. E. Key Issues in Licensing and Supervision of Microinsurance Financial Industry Department Insurance Division 19
  20. 20. E. Key Issues inLicensing and Supervision of Microinsurance In 2011, MEF issue circular on Issuance of Temporary License for Microinsurance Condition of Temporary Licensing: 1/ Microinsurer: -Minimum paid-up Capital : 150,000USD -Deposit 50,000 with MEF -Maintained 100,000USD as solvency margin 2/ Community Based Health Insurance Implementer (CBHI) -Summit CBHI proposal scheme to MEF -Shall have enough financial resource for at least 3years project Financial Industry Department Insurance Division 20 Licensing
  21. 21. E. Key Issues in Licensing and Supervision of Microinsurance All microinsurer and CBHI have to comply with : 1/ Fit and Proper requirement of the Management 2/ Restriction of size of a microinsurer 3/ Validity of license for microinsurer: valid for 1 year from the date of issuance . 4/ Microinsurer have to summit audited financial report within 3months after the end of each fiscal year. 5/ licensee shall submit statistics and insurance business report such as monthly, quarterly, semester report to MEF before 15th of each month, quarter, and semester. Financial Industry Department Insurance Division 21 Supervision
  22. 22. Challenges  Inadequate legal frame work and market infrastructure  Shortages of skilled workers, education and public awareness, little experiences  Remains a pilot with commercial insurers and NGOs  Small market where the insurance premiums account for less than 0.3% of GDP  Little retail distribution  low product and distribution innovation  Ineffective payment systems and banking penetration  Insurance tax rate  Retention capacity is low Financial Industry Department Insurance Division 22 E. Key issues in Licensing and Supervision of Microinsurance
  23. 23. E. key Issues in Licensing and Supervision of Microinsurance WAYS FORWARD: POTENTIAL FOR REPLICATION AND IMPLEMENTAION  Insurance regulation is essential for expanding and building confidence  Education and public awareness need to be addressed for both of microinsurance and social protection  Identify interventions on microinsurance and social protection  Consensus and collective commitment from all concern authorities and development partner  Priority insurance products such as health and crop insurance  Develop microinsurance through a sector base approach Financial Industry Department Insurance Division 23
  24. 24. Financial Industry Department Insurance Division 24

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