5 Foreign Firms Licensed to Enter Myanmar's Fledgling Life Insurance Market
By AUNG THIHA 8 April 2019
YANGON — Myanmar has for the first time allowed foreign insurance companies to operate in the country’s life insurance market.
The Ministry of Planning and Finance announced on Friday that it has 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.
Local companies that can provide life and general insurance can team up with foreign firms with offices in Myanmar to improve their competitiveness, Planning and Finance Ministry Director General U Zaw Naing told The Irrawaddy.
“We have permitted foreign companies in order to improve the life insurance market in our country, which is the least developed in ASEAN,” he said.
The move will provide the public with a wider choice of options and help reduce customers’ premiums.
The Finance and Planning ministry will monitor the new entrants’ activities to make sure local companies can compete.
U Soe Win Thant, however, director of Global World Insurance Co., is worried that the foreign firms will swamp the local market.
“Because they are both financially and technically superior to local companies, they will lead the market,” he said.
In addition to one government-run provider, there are currently 11 local private insurance companies in Myanmar — eight are licensed to sell both life and general insurance while three may sell life insurance only.
Under the existing laws, only 35 percent of a local company may be owned by foreign investors.
While CB Insurance Executive Director U Thaung Han is optimistic that the five foreign insurance companies — all leading firms in the international insurance market — will help develop the domestic market dramatically, he is also concerned that their operations will challenge local companies.
“But it is not that foreign companies can have an immediate impact on local companies. Moreover, the ministry will also regulate the market,” he said.
According to private insurance companies, only 1 percent of the country’s population is interested in having life insurance, and most of the insurance bought is for vehicle and fire insurance.
Translated from Burmese by Thet Ko Ko.