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Insurers authorised to provide bancassurance in Myanmar

Prudential Myanmar Life Insurance Limited, a subsidiary of UK-based Prudential plc, has signed a partnership with Yoma Bank to provide Myanmar customers with life insurance solutions.

The two firms signed a memorandum of understanding allowing Yoma Bank to distribute Prudential Myanmar’s savings and protection products at its branches across the country, according to a release on March 5. Yoma Bank has over 80 branches across 43 cities.

The announcement comes after the Insurance Business Regulatory Board (IBRB) on March 4 released three directives, including one – Directive No 2/2020 – allowing banks and microfinance institutions to operate as agents selling insurance after obtaining approval from the Central Bank of Myanmar and Microfinance Business Supervisory Committee.

The practice, known as bancassurance, is expected to help insurance providers extend the reach of their products. According to research commissioned by KBZ MS, the total bancassurance channel in Myanmar could grow to K2 trillion [US$1.3 billion] if applied to the total projected insurance market in Myanmar by 2029.

As such, Directive No 2/2020 has been long anticipated by the industry. Up until its release, only two insurance providers – KBZ MS and AYA SOMPO – were authorised to engage in bancassurance on a provisional basis.

Along with the release of the directive regarding bancassurance were two directives regulating insurance licensing and insurance product approval process.

Directive No 1/2020 stipulated that insurance providers must seek separate licenses to offer life and non-life products.

Directive No 3/2020 indicated that all new insurance products require approval from the IBRB, according to the Insurance Business Law. Only one product can be submitted for review to the IBRB each time.

In November 2019, Prudential together with Japanese Dai-ichi Life, Hong Kong AIA, US Chubb and Canadian Manulife were granted a licence from the Ministry of Planning and Finance of Myanmar to operate a wholly-owned life insurance business in the country.

Insurance liberalisation is a flagship reform of Daw Aung San Suu Kyi’s government. Her administration had initially committed to opening up the insurance market in the first quarter of 2017.

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Source : Myanmar Times

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