• Government finally makes keys decisions for future liberalisation • Key foreign life insurance companies ready for 100% owned operations • Joint-ventures in the making for the general (non-life) insurance segment • Myanmar offers significant growth opportunities in the short to long term • The real estate sector will benefit in different ways from the new insurance direction

1. Myanmar | Research Reports
Special Report
INSURANCE REPORT May 2019
Jostling for pole positions as market liberalises
Summary
• Government finally makes keys decisions for future liberalisation
• Key foreign life insurance companies ready for 100% owned operations
• Joint-ventures in the making for the general (non-life) insurance segment
• Myanmar offers significant growth opportunities in the short to long term
• The real estate sector will benefit in different ways from the new insurance direction
THE NEW ERA FOR INSURANCE
After a seven-year period of waiting, the process for
the opening up of Myanmar’s insurance industry in
Myanmar looks set to begin in earnest starting in
2019. Foreign insurers with hundreds of years’
worth of expertise along with eager local
companies are poised to finally play a driving role
in the sector’s development. Insurance in
Myanmar is primed to move well beyond today’s
low base into a modern, international enterprise
that can bring enormous economic and social
benefits to the country and its real estate sector.
HISTORICAL CONTEXT
During the colonial period and the first few years
of independence Myanmar had a liberal insurance
sector that saw more than 100 foreign insurers
operating in Yangon. But as early as 1952 the post-
independence government started to take a more
active role and eventually all private insurance
activity was abolished in 1964 culminating in
nationalisation.
Although a law reopening up of the sector was
passed in 1996 it was not until 2012 that 12 local
private insurers were granted licenses; five of these
commenced operations in 2013. Most have both
life and general insurance licences with widely
varying levels of activity.
At present the sector remains highly restrictive
with private insurers only allowed to offer specific
policies with the same premiums and limited cover
unless pooled with Myanma Insurance, which still
dominates the insurance landscape.
In preparation for the opening up of the insurance
sector to foreign players, the regulatory body
allowed representative offices to commence in
2012. Fourteen foreign insurers eventually set up
but were not allowed to offer insurance policies
apart from the limited exception of the Thilawa
Special Economic Zone, where a number of

2. Myanmar Insurance Report May 2019
2
Japanese insurers started operations. A number of
foreign brokerage companies were also opened
during this time, mostly acting as representative
offices involved in research and planning.
After an initial flurry of activity by the
representative offices, a long waiting game ensued
with no further momentum from the government
beyond the usual positive words at conferences. A
number of the offices eventually shut down
operations in frustration. However, the issuing of
operating licenses in 2019 will move the sector to
the next stage of development, hopefully leading to
a surge in the insurance sector over the coming
decades.
GENERAL INSURANCE
General insurance is also known as non-life
insurance and broadly covers losses made from
particular events such as fire, theft or accident. In
most countries in the region the sector, as
compared to life insurance, is often dominated by
local players. Normally in a frontier market like
Myanmar general insurance initially takes the
lion’s share of premiums compared to life
insurance because businesses often require cover
while personal insurance attracts car and property
owners who could afford to pay premiums and who
can easily understand the rationale behind such
policies. Also regulations in various business
sectors may specify insurance cover for certain
risks.
GROSS WRITTEN PREMIUM (GWP) AMOUNT
FOR PRIVATE SECTOR GENERAL INSURANCE
POLICIES IN MYANMAR
Source: New Asia Property Research / Myanma Insurance
The growth in the sector has been significant
although this is from a very low base. This is due to
the infancy of private insurance and the severe
restrictions on maximum coverage and premiums
by the regulator. Motor and fire insurance are the
most rapidly developing product lines. Commercial
insurance products will likely play a large part in
the market in the initial growth stages to protect
marine, aviation, fire and liability risks.
Accelerating car and property ownership
nationwide will act as a catalyst for further growth
expansion in personal insurance.
PROPORTION OF GENERAL INSURANCE
POLICIES GWP BY PRIVATE COMPANY 2017
Source: New Asia Property Research / Myanma Insurance
IKBZ, part of the KBZ Group of Companies,
including KBZ Bank, collected over half of the total
written premium amount for the private sector in
Myanmar in 2017. The group’s bank branches can
be used to promote and sell policies using a
bancassurance model given the limited scope of
direct selling though agents at this stage. A number
of local license holders have hardly played any role;
in all likelihood being a “me too” gesture when
obtaining the initial licenses.
The government will allow foreign general insurers
to operate only as a joint-venture with a local
insurer (through buying shares in the existing local
entity) and can only have 35% share which
complies with the new Companies Law. For
insurers from Thailand and Japan their own
domestic regulations prevent them from owning
wholly-owned subsidiaries abroad, so JVs are the
only method of entry. Japanese Tokio-Marine
Holdings is forming a joint-venture with local
insurer Grand Guardian Insurance. Sompo Japan
Nipponkoa Insurance has entered into an
agreement to set up a JV with AYA Insurance
Company. IKBZ is to tie up with Mitsui Sumitomo
Insurance.
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2015 2016 2017
Millionskyat
52%
17%
11%
9%
8%
3%
IKBZ Grand Guardian AYA Myanmar First National Aung Thitsar Oo Others

3. Myanmar Insurance Report May 2019
3
LIFE INSURANCE
GROSS WRITTEN PREMIUM (GWP) AMOUNT
FOR PRIVATE SECTOR LIFE INSURANCE
POLICIES IN MYANMAR
Source: New Asia Property Research / Myanma Insurance
Life insurance is in its very infancy with very little
market penetration. In fact even after rapid growth
in 2017, premiums still amounted to below USD
0.50 per person. Life insurance consists of
collections of premiums over a long period of time
often for endowment policies. The concept of long
term savings in Myanmar has struggled take root
given the history of demonetization of the currency
and periodic banking crises, which have left most
citizens distrusting of financial institutions. It
should be said that Vietnam has had its fair share
of similar woes and the life insurance sector has
been booming for many years with its emphasis on
savings products.
PROPORTION OF LIFE INSURANCE POLICIES
GWP BY PRIVATE COMPANY
Source: New Asia Property Research / Myanma Insurance
At present there has been restrained activity in the
life insurance market with local companies having
limited involvement with the exception of Aung
Myint Moh Min Insurance Company. Most
premiums are underwritten by Myanma Insurance
primarily for pensions and endowments for
government staff and military personnel. In many
countries in the region life insurance is dominated
by foreign companies that have the experience of
actuarial methods underpinning underwriting of
such policies, methods of widespread selling of
policies, confidence based on reputation and
investment know-how.
In a frontier market it also takes time for life
insurance to take root as people invest in such
policies when they have greater discretionary
spending, something that is currently limited in
Myanmar. As the country grows economically
more people will be classified as middle income
earners and will spend on savings products such as
life insurance, which usually grows substantially
after passing an inflection point. Countries such as
Thailand, Vietnam and Malaysia are now
witnessing phenomenal growth in the sector with
rapidly increasing incomes combined with a still
immature insurance industry compared to mature
insurance markets and stagnating growth in
Europe and Japan.
Life insurance can provide attractive savings
products given the limited role of time deposits in
the banking system and the risks associated with
stock market investing as is the case of Vietnam.
Globally, life insurance accounts for just over 50%
of total premiums but in ASEAN the sector
represents nearly 75% given the relative
immaturity of the banking system regionally.
Compared to general insurance the life insurance
sector is set to be more open to foreign involvement
with initially a maximum of three foreign insurers
being allowed to have a 100% owned subsidiary.
There is no limit on possible joint-ventures with
locals companies at up to 35% foreign interest. For
most of the international life insurance players full
ownership is far more preferable and at present
five companies have been awarded initial licences
to operate fully owned subsidiaries by the
Myanmar Ministry of Planning and Finance: Dai-
Ichi Life, AIA, Chubb, Manulife and Prudential.
Local player CB Insurance is looking to partner
with Thai Life Insurance because under Thai
regulations companies can only operate JVs
abroad. Meanwhile, Capital Life looks set to form a
JV with Japan’s Taiyo Insurance while Grand
Guardian has agreed to partner Nippon Life from
Japan; both as a result of operating requirements
for Japanese companies working abroad.
65%
12%
6%
6%
5%
6%
Aung Myintmo Minn IKBZ CB Grand Guardian Capital Life Others

4. Myanmar Insurance Report May 2019
4
POSITIONED FOR GROWTH
GROSS WRITTEN PREMIUM AMOUNT FOR
INSURANCE POLICIES 2017
Source: New Asia Property Research / Myanmar Insurance /
Cambodia Insurance Institute
Currently the insurance sector in Myanmar is in its
early infancy, which is evident when compared to
lesser populated countries in ASEAN. Even Laos, a
relatively undeveloped country with a population
of only seven million population, has similar
premium levels to Myanmar. With the further
opening up of the industry to the private sector and
especially foreign insurers - all this is set to change
dramatically, even in the first few years.
A better comparison going forward is Vietnam,
which opened up its insurance sector in the 2000’s,
but now has a vigorous foreign life insurance
contribution and total premiums of around 5.74
billion USD in 2018; nearly a hundred times that of
Myanmar. Total penetration was around 0.08% of
GDP in 2015 from figures released by Swiss RE
compared to around 1.5% in Vietnam, which itself
is still an emerging insurance market. The scope for
substantial growth of insurance spanning more
than one generation is very compelling for both
local and global insurance players.
Myanmar could reap a dynamic demographic
dividend over the coming decades as a larger
proportion of the population are of working age
compared to dependents both younger and older.
PROJECTED POPULATION 15-64 AGE GROUP
IN MYANMAR
Source: New Asia Property Research / United Nations,
Department of Economic and Social Affairs, Population
Division
This compares favourably with many ageing
populations in countries in the region. For life
insurance this is one of the key factors behind the
future growth of the industry along with rapid
economic growth that would propel a large
proportion of the population into the middle
income bracket, which is the main target market.
POSITIVES FOR REAL ESTATE
It is estimated that around half a million people are
employed in some capacity in the insurance
industry in Vietnam. Although Myanmar has some
way to go before coming close to this figure, it
shows that with a successful liberalisation process
Myanmar can reap the reward with a significant
number of relatively skilled jobs that will positively
impact the office market. Many of those of these
jobs will handle the selling and administering of
insurance policies.
There are three broad methods of selling insurance
policies to the general public. One is through
bancassurance which involves selling through
existing bank branches operated by banks under
the same holding company as the insurance
companies, as is the case for many of the local
insurers in Myanmar, but it is also possible through
a relationship with an outside bank. A more
traditional method is through tied-agents, whereby
independent agents represent a particular
insurance company. The third way is through
digital channels which are growing rapidly in Asia,
an approach used by Zhong An from China which
0
50
100
150
200
250
Cambodia Myanmar Laos
MillionsUSD
30 000
32 000
34 000
36 000
38 000
40 000
42 000
44 000
2015 2020 2025 2030 2035 2040 2045 2050 2055
Thousands

5. Myanmar Insurance Report May 2019
5
amassed 500 million customers in the country
since its founding in 2013. However, person-to-
person relationships are likely to remain a key
focus on the business for some time to come.
It is likely that the main head office of most of the
foreign insurance companies will be downtown
given that the regulatory agency and Myanma
Insurance both have their offices located there.
Many insurance policies will be underwritten for
businesses and so proximity to their client base will
be important. Most will take a floor of a building,
but will over time graduate up to a whole building
as the market grows. Regionally, insurance
companies take non-prime space as their main
office but usually in good quality grade B offices. In
Yangon, given the lack of office space, insurers
would opt for the better quality office buildings and
should be able to obtain competitive rates in a
relatively soft market and given the magnet effect
in attracting other insurance-related tenants.
Presence in other parts of Yangon as well as the
main cities will also be a major part of their rollout
over the first few years and further afield beyond
that. Locations where people can pay premiums
plus put in claims and for agents to visit and do
paperwork will be required. It is likely that the bulk
of the jobs in the insurance industry will be agents
and brokers with limited numbers in the more
technical fields such as underwriting, loss
adjusting and surveying. Many agents will not have
a fixed base, instead visiting their client base
regularly at their homes. However they will still
need to visit the insurance companies to process
policies, report claims and learn about new
products, and so easy-to-reach locations
throughout the country will be important.
Secondary locations for insurers and brokerages
could be office space but would more likely take the
form of a retail location with easy access for
visitors. Many of the local partners in future JVs
will have space of their own that they currently use
and can be upgraded. The opening up of the
insurance sector will not be like the “Big Bang”
when the telecoms sector opened to two mobile
players who quickly devoured office and retail
space. However in the medium-and long-term the
direct effects on demand for office space for
insurance should be just as significant.
One of the key financing methods for government
infrastructure spending is through bond issues,
both of short and longer duration. Given the long
term investments of insurance companies covering
policies that can amount to a someone’s lifetime,
long-term bonds are in demand. As buyers of such
bonds, insurance companies play a very important
role in the development of an efficient capital
market that can support infrastructure spending
that in turn positively impacts the real estate sector
as roads, bridges and mass transit networks that
enhance property values.
Insurers want to reduce claims and the insured
want cover and also lower premium payments for
their properties. As a result insurance provides a
market-driven regulatory system that helps to
reduce risk such as through safety improvements
to buildings specially to prevent fires and other
damage. The effect will be a general upgrading of
construction quality towards more international
standards.
If the reforms to the insurance industry do take
place as promised the impact may not be dramatic
to begin with but over time will play a fundamental
role in the long term economic and social
development of Myanmar
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