Carlo Cheo, managing director of Forte Insurance, talks about his company’s experience of operating in Cambodia for a decade and what the future might hold for the industry here

CEO Talk

By Kay Kimsong

What is happening in the insurance market right now?

The market is still growing [internationally] even though it is going through a recession. Cambodia is different ... the recession doesn't really impact on the insurance industry.

If you look at the infrastructure and construction going on [locally], this will give more growth.

I am pretty excited about the future of Cambodia.

Cambodia doesn't have a culture of buying insurance, so what strategy do you use to convince people that they need what you have to offer?

We provide insurance at all levels. For Cambodians, medical costs are getting more and more expensive.

I would just say that it will take time for Cambodians to go on the right track. So for me, we work to bring awareness to Cambodia.

My main concern is those on middle incomes and lower incomes - not the rich and not the poor.

It will take a while to make the public aware.

Is Forte the country's leading insurance company?

Yes, we gained the No 1 position in 2003 in terms of market share and in terms of clients - I am not talking about individual clients, but about corporate clients. In terms of volume we were number one in 2007.

And we foresee premium growth of more than 10 percent in 2009.

[Today] we employ 70 staff. Ten years ago we had just seven employees.

Do the different industry players compete fairly?

I can't blame my competitors because everybody wants to make a profit, right?

So it is a question of competition, but it must be within reason.

Do you think the Ministry of Economy and Finance favours state-owned insurers more than privately owned firms?

The answer is no. Even if Caminco were still owned 100 percent by the government, it would be a level playing field because we compete with each other.

The key question is whether you know the business or not.

What insurance products does Forte sell?

Forte provides several classes of insurance products, including automobile insurance, casualty insurance, property insurance, engineering insurance and marine cargo insurance.

We are going to move beyond these products.

Are your premiums going to change?

As the market grows, new demands arise. Cambodia's potential means more and more people will show interest in [insurance products].

New investment will come in, and as time goes by there will be more money in people's pockets, and that will lead to more interest in buying insurance.

So as long as GDP grows, we will grow. Normally, insurance grows faster than GDP growth, and [in Cambodia] we have started from a low level.

Can you tell us your company's turnover?

Yes, why not? We are always open about that. For 2007 (excluding oil and gas) premiums [turnover] was US$6.8 million.

In 2008, excluding oil and gas premiums, [turnover] was $7.8 million.

Who are your clients?

We have more foreign than local customers because, again, the local consumer market is still not yet here.

Once it develops [further] there will be more premiums.

Normally, individual insurance generates more than commercial clients. But it all depends on awareness. I look at the middle-income people: As you go along, you find that insurance is the best investment they can have. If we are talking about challenges, it won't take too long - maybe three years.

So how do you go about educating people about insurance, then?

It's very difficult to say because it is an individual thing. I have seen that in Singapore.

When the country develops, other things develop including education, medical treatment; large companies come in; standards of living increase.

You find that as salaries rise, people need insurance. It will take a while - even today in Singapore some products don't sell well.

What can you tell us about the insurance industry in Asia and the rest of the world?

I think other countries are moving faster than Cambodia. I would give the example of Vietnam, a country that faced similar challenges to Cambodia after the war.

But today the premium market in Vietnam is worth $1 billion, and in Cambodia it is just $20 million. They are moving faster than us.

In a country like Hong Kong insurance premiums have reached 23 percent of GDP, and in Japan, which has the biggest market in Asia, it is more than 10 percent.

In other countries insurance is one of the backbones of the economy.

What made Forte decide to enter the Cambodian market 10 years ago?

I saw Singapore go through this, and I've seen many other countries go through it - the main thing is to know what the government will do.

My advantage is in thinking ahead to where a country can go. If I can anticipate that - and right now I am anticipating actively - I can get myself prepared. That is why I came here, and not just to be an expert, but to help.

I have spent many hours training my staff to be professional.

It is not easy to lecture the Cambodian community, especially in English, which is not commonly spoken by the majority of Cambodians.

And we have one Cambodian staffer here - she is No 1 in Malaysia. She is the best.

Am I proud of Cambodia? I think it is a national prize, seriously. The government does not know that yet.

Finally, what is your vision for the next 10-20 years in terms of your insurance business?

Cambodia is not a place to make predictions.