The Ministry of Planning and Finance has finally given the green light for foreign companies to enter Myanmar’s nascent insurance market, selling life insurance policies through local subsidiaries.
British Prudential, Japanese Dai-chi Life, AIA from Hong Kong, Chubb from the US, and Manulife from Canada are among those on a list published by the planning ministry on Friday, according to Investzine, a business news site focusing on Southeast Asia.
In 2013, state-owned Myanma Insurance’s six-decade monopoly on the insurance market, ended when the government expanded the playing field to 12 local private companies. Despite the addition of the new choices, just 0.01% percent of Myanmar’s citizens have a life insurance policy, while just 0.07% have insurance of any sort, according to a report by Aon Inpoint.
The door to foreign companies joining the fray was first cracked open in 2014 when three Japanese insurers — Sompo Japan, Tokio Marine & Nichido Fire and Mitsui Sumitomo — were given permission to operate in the Thilawa Special Economic Zone, but only in the SEZ.
To say there’s room for growth would be a massive understatement. The Asia Insurance Review projected in 2014 that Myanmar’s insurance market could reach $2.8 billion dollars by 2030. However, others like Dai-chi Insurance predict a more modest $1.3 billion dollars in 10 years.
But even that lower figure would represent a giant uptick given that the insurance market is worth just US$13 million, according to a 2017 estimate by the planning ministry.
The government’s move comes two years after the finance ministry made a commitment to liberalize the insurance market, something that saw numerous delays on the road to Friday’s decision.