An exciting time awaits the insurance market in Myanmar with the recent opening of its economy. The government has given 12 licenses (out of 20 expected for the market) to local companies in September 2013, ending the monopoly enjoyed by government-owned Myanma Insurance Enterprise, which was established since nationalization in 1963.
The main local groups that were granted the licenses are Maw Myanmar, Kanbawza, Asia World, KMA, Htoon and Shwe Taung (see below insurers list). The Finance Minister has also created the Insurance Business Supervisory Board (IBSB) to regulate the industry. The minimum paid up capital for life insurance license is K6 billion (US$6.18 million) and K46 billion (US$47.4 million) for life and general insurance license.
It is, however, not clear when foreigners will be able to enter the market. The initial date mentioned was 2015 but it was then postponed to later. It is unlikely to happen soon as the local industry needs to structure itself. Specialists are looking carefully at the government’s decision at the end of this year regarding the opening the banking sector to foreign banks, as there might be some similar development with the insurance sector. In the meantime, a few foreign insurers have already opened a representation office, such as, Japanese insurer, Sampo (since 1995), ACE and more recently AIA.
The current market size remains very small: no figures are available but the only compulsory insurance is the third party car insurance and yet, many car owners do not adhere, as this requirement is not properly enforced. Most foreign insurers consider that an individual is ready for insurance products when his annual income is over US$ 1,000: Myanmar’s annual income per head is currently US$885.
Non-admitted policies are not allowed but it is not clear in current regulation if 100% of risks should be placed locally or just minimum part of risk should be placed locally through a local fronting program.
Insurance intermediary is also a new profession to be created: only individual insurance agents are allowed (around 500 currently registered in the country) but no agencies or insurance brokerage companies are allowed for the moment.
With a population of 60 million inhabitants, the market potential remains important and it is the last main market in Southeast Asia to open so foreign players monitor it closely. Reuters estimated that the annual premium should reach US$1.6 billion in few years, equivalent to the size of Vietnam’s insurance market or 1/10th of Singapore market.
List of private insurers which were granted an insurance license:
IKBZ Insurance Public Company
Great Future International Insurance Company
Capital Life Ltd Insurance Application
Global Standard Insurance Public Company
Green Asia Insurance Company
Jade King and Queen Service Company
Mya Wady Insurance Company
Pillar of Truth Insurance Company
Citizen Business Insurance Company
Ayeyar Myanmar Insurance Company
Myintmo Min Insurance Company