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Four local life insurance providers form JVs with foreigners

Four domestic life insurers will cooperate with their foreign counterparts to form joint ventures in Myanmar, according to the Myanmar Insurance Association (MIA).

Citizen Business Insurance (CB Insurance), First National Insurance, Grand Guardian Insurance and Capital Life Insurance will form joint ventures with foreign insurers, said U Thaung Han, managing director of CB Insurance and CB Insurance will be forming its joint venture with Thai Life Insurance, which is based in Thailand, to offer life insurance products in Myanmar,” U Thaung Han said.

The development comes after the Ministry of Planning and Finance (MOPF) earlier this year allowed foreign insurers to operate in the Myanmar insurance market. Local insurance providers have been encouraged to cooperate with the foreigners to become more competitive in providing their services.

U Yan Paing, managing director of Capital Life Insurance, said: “We will be able to benefit from the technical knowledge and experience gained through a joint venture with a foreign insurance provider. In return, the foreign entity will also gain from our understanding of the local market and distribution network. We expect the deal to be successful.”

Meanwhile, other local insurers are also exploring opportunities to work with foreign providers. “We are interested to form a joint venture with international insurance providers and are in discussions with several firms to do so,” said U Soe Win Thant, a director at Global World Insurance.

Foreign life insurers have been given two options to operate in Myanmar: as 100 percent wholly-owned subsidiaries or under a joint venture with local insurers. Foreign non-life insurance providers must operate under joint ventures only.

This month, AIA Company, Chubb Tempest Reinsurance, Dai-ichi Life Insurance Company, Manufacturers Life Insurance and Prudential Hong Kong were granted licenses to operate in the domestic life insurance market.

Since 2013, 11 local insurers have been granted licenses to operate, while 14 foreign insurers have set up 30 representative offices. Up until this year, none have been allowed to do business in the country except in Thilawa where three Japanese companies were granted permission to operate non-life insurance businesses in the special economic zone – Tokio Marine & Nichido Fire Insurance, Sampo Japan Insurance and Mitsui Sumitomo Insurance.

In Myanmar, non-life penetration in 2015 stood at 0.07pc and around 0.01pc for life, resulting in total market penetration of just 0.08pc, less than 1pc, according to Swiss Re Sigma.

Source: Myanmar Times

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