Insurers see surge in Myanmar market interest driven by COVID – 19 pandemic22 พฤษภาคม 2563
While COVID-19 has increased awareness on the importance of health insurance and led to better sales of life and health policies, demand for other insurance products has taken a beating, industry leaders say.
For KBZ MS General Insurance, monthly sales of individual health products have gone up five times compared to pre-pandemic figures.
“This is partly driven by our extra 50 percent-free COVID-19 benefits campaign, but in general people are more receptive to the concept of protection when they’re faced with an immediate crisis,” said Anil Mancham, CEO of KBZ MS. The firm is a partnership between Yangon-based IKBZ Insurance and Japan’s Mitsui Sumitomo Insurance.
“Employers across the board are stepping up to provide health insurance for their employees, ranging from small companies to large corporates with over 10,000 employees,” he added.
Other insurance providers, such as AIA, Manulife, GGI Nippon Life, have seen similar increases in enquiries for health insurance coverage.
“After COVID-19 became more serious in Myanmar, we received more inquiries and requests for information on our social media about life and health insurance,” commented AIA Myanmar CEO Luc Nhon Ly.
However, semi-lockdown orders in Yangon and Mandalay, as well as curfews imposed across the country, have led to a drop in the general insurance market. There has been a more than 50pc drop in motor claim cases for some providers in April compared to the same period last year.
Mr Mancham pointed out that COVID-19 financial losses on business and individuals could bring about a decline in renewals of fire and motor insurance.
Travel insurance has also taken a severe hit after travel restrictions were put in place and tourism came to a standstill.
Historically monopolised by state-owned Myanma Insurance, the country’s fledgling insurance industry only opened up to private local players in 2013 and to foreign providers half a year ago.
Last November, five foreign life insurers and six joint ventures were given licences to enter the market. The licencing is a flagship project under the National League for Democracy government who hopes to draw on foreign investments and modernise the financial sector.
Recent changes to Myanmar's monetary policy are expected to have an impact on longer growth plans, some insurers say. To mitigate the impact of COVID-19, the Central Bank of Myanmar this year lowered interest rates three times. The central bank rate is now just 5 percent, from 8pc before the pandemic struck.
As most insurers have government bonds and fixed deposits locked in at over 9pc interest rate, these investments will be rolled over into lower-yielding assets because of the rate cuts, said Mr Mancham of KBZ MS.