The outlook for 2018 for the Myanmar insurance sector is positive as plans to liberalise the imarket that were not implemented in 2017 could materialise this year, according to Willis Towers Watson.
In its “Asian Insurance Market Report 2018”, the global multinational risk management, insurance brokerage and advisory company says that it is also expected that local private insurers would be able to transact outward reinsurance to manage their risk which will then create greater opportunities for the overseas reinsurance broking/reinsurance market.
As more foreign direct investments ?ow into the country, investors are likely to select international brokers to ful?ll speci?c insurance requirements, leading to an increase in demand for reinsurance.
At the same time, greater capacity is becoming available offshore for Myanmar risks due to factors like increased familiarity of risks and more statistics becoming available.
Health insurance can be viewed as a potential area of growth as it is still underserved by local companies, and there will be opportunities if reinsurance providers look to offer products that are affordable and suitable for the local market, says the report.
There are more foreign brokers competing for business. Local clients still look at pricing as a key factor, whereas foreign investors view the coverage, credit rating of the carriers, servicing and claim capability as a higher priority.
The power sector has the potential to grow as there is a requirement for power to develop the economy. The pace of reforms, clarity of government policies, and the stability of the current government are factors leading to an increase in the development cost of projects. At the same time, developers are placing a higher priority on social and environmental impact as reputational risk is high on corporate agendas.
Outlining recent developments in the insurance sector, Willis Towers Watson notes that recently, Myanma Insurance (MI) announced a new rule, either to retain 30% of the risk if the sum insured is up to US$8 million, or a certain percentage equivalent to a maximum $2.5 million if the sum insured exceeds $8 million. This new rule has been effective since 1 November 2017 for new risks; however, MI has postponed implementing the rule to 1 January 2018 for renewal business. MI will take retention in all fronting businesses except motor insurance.
Meanwhile, Myanma Insurance Association was launched officially on 15 January 2018. Membership is restricted to locally licensed insurance companies at present.