Local, Foreign Insurance Cos. Readying to Sell in Myanmar
By Aung Thiha 23 July 2019
YANGON—Myanmar’s Ministry of Planning and Finance is set to give the go-ahead to joint ventures between local and foreign insurance companies next month.
The country’s insurance business regulatory board, which is overseen by the Ministry of Planning and Finance, is currently scrutinizing companies that have submitted requests for proposals (RFP), U Zaw Naing, the board’s secretary, told The Irrawaddy.
“I can’t disclose the names of the [foreign] companies for the time being. We have interviewed those companies and it is likely that [we will give them permission] next month,” he said.
Nine foreign companies have expressed interest, but only six of them submitted RFPs for joint ventures, he said.
Partnering with foreign insurance firms that have opened representative offices in Myanmar, local companies such as IKBZ, AYA Myanmar Insurance and Grand Guardian Insurance will provide general insurance services and GGI, Capital Life Insurance and CB Insurance will provide life insurance service.
Foreign companies will be able to hold up to a 35-percent stake in joint insurance ventures while the remaining 65 percent must be locally owned, according to U Zaw Naing.
AYA Myanmar Insurance will partner with a Japanese insurance firm. Its executive director, U Myo Min Thu, said, “Local companies will grow bigger due to the investment of foreign companies. This will create job opportunities and contribute to the national economy.”
The partnership will also improve existing insurance services and help create new insurance products, he added.
At present, there are 19 local insurance companies providing general and life insurance services in Myanmar.
“I heard that [the insurance business regulatory board] will invite [expressions of interest for the establishment of joint ventures between local and foreign insurance companies] again for those who were not able to make preparations [for partnerships] this time,” said director U Soe Win Thant of Global World Insurance Co.
In April, Myanmar allowed for the first time foreign insurance companies to operate in the country’s life insurance market.
The Ministry of Planning and Finance 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.
Surveys by private insurance companies estimate that only 1 percent of the country’s population is currently interested in purchasing life insurance. 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.