Japanese insurance firms are pushed the growth of insurance market in Myanmar

With Myanmar’s Ministry of Planning and Finance giving the green light to six joint ventures between local and foreign insurance companies at the end of July, Japanese insurance firms are poised to dominate the country’s insurance market.

Five of the six foreign insurance companies now permitted to provide life and general insurance services together with local companies are from Japan; the sixth is from Thailand.

Japan’s Taiyo Life and Nippon Life and Thailand’s Thai Life will partner with local companies Capital Insurance, Grand Guardian Insurance and Citizen Business to provide life insurance.

In general insurance services, Japan’s Sompo Japan Nipponkoa, Tokia Marine and Nichida Fire, and Mitsui Sumitomo will partner with Aya Myanmar Insurance, IKBZ and Grand Guardian Insurance.

“Their entrance will strengthen the insurance market. There will not be changes overnight, but it is fair to say that the industry is developing in the right direction,” U Maung Maung Thein, who had served in Myanma Insurance for more than 20 years, told The Irrawaddy.

“I say there will not be immediate improvements because public knowledge about insurance is quite limited here. The number of policyholders is low in Myanmar. Only well-off people can buy insurance here,” he said.

Because Japanese insurance companies have already had representative offices open in Myanmar for some time, and because of their technology and practical expertise, their entrance will contribute more to Myanmar’s insurance market than will insurance firms from other countries, he said.

More freedom for the private sector

One official from a private insurance company suggested to The Irrawaddy on condition of anonymity that the government should relax rules and regulations so that private insurance companies can introduce new products and operate more freely.

In 2013, the government allowed privately run local firms to operate in the country’s insurance market, ending a 61-year-long monopoly over the market by state-run Myanma Insurance.

The Ministry of Planning and Finance in April granted licenses to five foreign companies to sell life insurance: Chubb Tempest Reinsurance of the United States; Dai Ichi Life Insurance of Japan; AIA of Hong Kong; Prudential of England; and Manufacturers Life Insurance of Canada.

Thus far, there are 25 local and foreign insurance firms operating in Myanmar.

“Local companies will grow bigger due to the investment of foreign companies. This will create job opportunities and contribute to the national economy,” said U Myo Min Thu, executive director of Aya Myanmar Insurance, which will partner with Japan’s Sompo Japan Nipponkoa.

According to industry sources, the country’s population is not much interested in purchasing life insurance just yet. Most current plans are bought for vehicle and fire insurance.

At present, local companies provide over 15 kinds of insurance, including life, travel, fire, health and vehicle.

(The Irrawaddy: https://www.irrawaddy.com/news/burma/japanese-firms-push-growth-myanmar-insurance-market.html )

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