IKBZ will corporate with Mitsui Sumitomo, Insurance the Japanese company, to provide general insurance services in Myanmar

IKBZ will cooperate with Japanese company Mitsui Sumitomo Insurance to provide general insurance services. The plan is expected to be operational by September of this year, according to U Nyo Myint, Deputy Chairman of IKBZ.

“We will submit a Request of Proposal this month to implement the Joint Venture with Mitsui Sumitomo Insurance,” he said. “They will only approve it if it meets their requirements.”

After opening up the insurance sector, the Ministry of Commerce approved five foreign life insurance companies, namely: Japan’s Tokio Marine Holdings, Nippon Life Insurance, Sompo Holdings, Meiji Yasuda Life Insurance and MS&AD Insurance Group Holdings – the latter company on this list being a subsidiary of Mitsui Sumitomo Insurance. The joint ventures will be able to invest up to 35 percent of the share.

The government is allowing insurance companies to provide both general and life insurance services. U Nyo Myint stated that they will first focus on the general insurance segment of the market.

For life insurance services, foreign insurance companies have two options: the first is that they can make a 100 percent investment, and the other is that they can form a joint venture with local insurance companies.

On the other hand, for general insurance services, foreign insurers are only allowed to provide services if they form a joint venture with local insurers.

Myanmar recently started allowing foreign insurers into the insurance industry. Some years ago, there was only one option for insurance in Myanmar: the state-owned Myanma Insurance Company, which was established in 1952.

According to Myanma Insurance, which also serves as a government body supervising the insurance industry, some options in the market then began to open up. Five private insurance companies based in Myanmar were allowed on May 25, 2013, four more private companies on June 14, 2013, and two more private companies on October 6, 2014.

Earlier this year, there came a sea change when the country allowed five foreign insurers, who are from U.S., Japan, Canada, Hong Kong and England. The foreign insurers are now creating stiff competition for local insurance companies.

However, not many people in Myanmar are actually purchasing insurance policies quite yet. Only 0.1 percent of the nation’s population of 53 million has purchased insurance policies. When compared to other countries in the region, Myanmar has the lowest number of insured residents; countries such as Malaysia are at five percent, Vietnam sits at 2.5 percent, and Singapore is at eight percent. 

Therefore, Myanmar is trying to increase the number of those insured to 2.5 percent by 2030.

(Myanmar Business Today: https://www.mmbiztoday.com/articles/ikbz-join-hands-japanese-insurer )

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