Myanmar: Opening of insurance mart may be delayed

Myanmar may only allow foreign insurance firms to operate in the country in 2018, three years later than earlier signalled by the government, reported Channel News Asia. Currently, 12 local companies offer six types of basic insurance, including automobile and fire cover.

But an influx of foreign investment has sparked a need for more complex products and greater capital. Mr Nyo Myint, senior managing director of KBZ Group, said that with the expansion of business in the country, there is a need for more insurance coverage.

“So in that sense, existing capabilities within our local companies are not sufficient,” he said adding that collaboration with the international insurance companies is needed.

Fourteen foreign insurers have already set up representative offices in Myanmar, in expectation of the government opening up the domestic insurance market next year. In Myanmar, the authorities require overseas insurers to set up representative offices there for at least two years before applying for an operating licence.

But Myanma Insurance, which has monopolised the market for 50 years, disagrees with early opening-up of the market. The state-owned insurance provider fears opening the gates could drown local players.

Mr Sein Min, general manager at Myanma Insurance, said: “If we allow (foreign players into Myanmar), our local market cannot compete with them.” He said that there is a need to develop local players first before considering allowing in foreign entities. “They can get the opportunity in the near future, maybe three years or four years later.”

Industry players believe the industry can grow by at least 5% annually. Reports have also estimated that the insurance market will be worth US$2.8 billion in 2030. In a population of around 60 million, only about one in 86 people in Myanmar has insurance policies at present, and this means the insurance market has huge growth potential.

Source: AIR eDaily