November 29, 2019 Myanmar’s Ministry of Planning and Finance (MOPF) on November 28, issued licences to major foreign insurers including UK’s Prudential, US-headquartered Chubb, Hong Kong’s AIA, Japan’s Dai-ichi Life and Canadian firm Manulife.
The government had already granted provisional licences to the aforementioned firms in April this year, after years of preparation. The full licence means insurers will operate in the country as 100% wholly-owned subsidiaries and is a significant sign of financial liberalisation for Myanmar.
Licences were also granted to six joint ventures (JVs). The three non-life JVs are between: Aya Myanmar General Insurance and Sompo Japan Nipponkoa Insurance; Grand Guardian General Insurance and Tokio Marine & Nichido Fire Insurance; and IKBZ Insurance and Mitsui Sumitomo Insurance. The three life JVs are between: Capital Life Insurance and Taiyo Life Insurance; Citizen Business Insurance and Thai Life Insurance; and Grand Guardian Life Insurance and Nippon Life Insurance.
Prudential Myanmar’s chief executive Asit Rath commented on their strategy: “A key focus of Prudential Myanmar will be to support national efforts to raise life insurance penetration, at just 0.05% of GDP in 2018, and financial inclusion in the country. With our technology-enabled approach, we not only aim to reach as many people as possible, but also ensure their experience with us is one of ease, simplicity and convenience.”
Russell Bundschuh, senior vice president of Chubb Group and president of Chubb Life, said: “We are pleased to launch our life business in Myanmar, a rapidly developing nation that recognises a successful, sustainable insurance sector is integral to the economic and social fabric of the country.”
The government has often come under fire for heavy protectionism and stalling on financial liberalisation and reform.
Recent official moves to liberalise and expand the market is primed to serve the country’s demographic of a growing, urbanising and digital-savvy middle class in a country where the mobile penetration rate is over 100%.
Myanmar’s insurance sector has a penetration rate of 0.01% and huge room for growth. It is estimated that Myanmar’s life market in 15 years could reach a valuation of US$900 million in gross written premium.
This article and content was reproduced from Insurance Asia News. By YVONNE LAU.