The Insurance Business Regulatory Board (IBRB) will allow foreign insurance companies to do business in the country in the new 2018-19 fiscal year, which will commence October 1, U Zaw Naing, the board’s secretary, said on August 28.
He said the IBRB, which was established by the Ministry of Planning and Finance in 2016, will allow foreign insurance companies to provide life and general insurance policies in 2018-19.
“We are planning to allow foreigners to participate in the domestic insurance market. We will hire international consultants to help us screen and review foreign insurance providers before permitting them to compete in the market,” U Zaw Naing said.
The IBRB has already invited proposals from international consultants. After it selects the right one, it will commence the necessary process to allow foreign insurance firms to enter the market, U Zaw Naing said.
Daw Sandar Oo, managing director of Myanma Insurance, said the state-owned insurance provider “welcomes foreign insurance firms. The local insurance market needs investments and new technology to grow. If foreign firms are allowed to enter, local insurance providers can cooperate with them to help develop this area in Myanmar,” she said.
If the IBRB is true to its word, the move allowing foreigners to compete in the local insurance industry will represent a step in the right direction for the country. As the sector opens up, residents of Myanmar will enjoy greater options in terms of policy and price.
Liberalising the insurance sector is important not just because penetration rates in Myanmar remain the lowest in the region. Foreign insurance firms are also among the biggest investors in sovereign bonds. As such, enabling global insurance providers to operate here may help the country develop a deeper bond market in the longer term.
Insurance penetration in the country is just 0.07pc of GDP, with the market now dominated by Myanma Insurance. Meanwhile, there are another 12 private local providers operating locally. Of these, three are life only, while the remaining nine firms are combined providers covering life and non-life, according to a report by Oxford Business Group.
According to the Central Bank of Myanmar, total gross written premiums (GWP) amounted to approximately K33.9 billion in the first quarter of 2017, with Myanmar Insurance accounting for 45.5pc of the total.
Foreign insurance companies are currently not permitted to do business in the country. However, three have been allowed to operate at the Thilawa Special Economic Zone, while a total of 27 have opened representative offices in Myanmar.
Currently, fire insurance, motor insurance, group life insurance, special travel insurance, health insurance and marine cargo insurance are the more popular policies in Myanmar, according to Global World Insurance.
