Shakeel Ahmad, UNDP deputy resident representative, addresses a July 29 workshop which aimed to address the Kingdom’s insurance challenges. Supplied
The UN Development Programme (UNDP) is working with the Insurance Regulator of Cambodia (IRC) on a new study of the Kingdom’s insurance sector.
The new initiative involves a thorough diagnostic analysis of inclusive insurance and risk financing. The study was discussed at a validation workshop, held in Phnom Penh on January 29.
The purpose of the workshop was to assess Cambodia's current insurance landscape, identify gaps and find solutions to improve the accessibility and affordability of insurance, especially for the country’s most vulnerable populations.
“In today’s world, interconnected risks such as economic uncertainties, climate change and health crises increasingly challenge our resilience. Inclusive insurance and risk financing are essential tools in this context,” said Shakeel Ahmad, UNDP deputy resident representative, as he opened the workshop.
“They play a critical role in protecting lives and livelihoods, ensuring swift recovery and preventing individuals and communities from falling into vicious cycles of poverty,” he added.
He explained that in Cambodia and other regions, poor and vulnerable communities – especially those in rural areas reliant on agriculture – face significant risks from natural disasters, economic shocks and other crises. However, he warned that insurance coverage remains severely limited.
Ahmad noted that the Kingdom’s insurance market reached $344 million in 2023, with a low insurance penetration rate of just 1.16 per cent of GDP and an insurance density of around $21.02 per person. In comparison, the global average is 6.3 per cent.
“However, we are pleased to acknowledge that the government is aware of this challenge and is pursuing the long-term goal of increasing the insurance penetration rate in the country to 5.5 per cent by 2030,” he added.
The study presented at the workshop confirmed that although Cambodia’s insurance market is growing, it still faces significant challenges in reaching rural and low-income populations.
Microinsurance products, which offer affordable and accessible financial protection, were identified as a potential solution to close these gaps.
These products could provide vital coverage for individuals facing unpredictable risks, such as farmers dealing with adverse weather conditions and small businesses struggling to cope with market disruptions.
Ahmad stressed that inclusive insurance is not just a safety net but a driver of sustainable development.
By ensuring financial protection, it can help reduce the adverse impacts of natural disasters and economic shocks, enabling faster recovery and stability.
“UNDP’s global partnerships, such as with the Insurance Development Forum and the InsuResilience Global Partnership, are instrumental in embedding insurance into broader development strategies, ensuring alignment with the Sustainable Development Goals (SDGs),” said Ahmad.
The workshop also showcased the IRC’s efforts to improve the Kingdom’s insurance regulatory environment.
Data from the first three quarters of 2024 revealed some positive growth across the market.
In Q1 2024, for example, Cambodia's gross premium income totalled $96.5 million, a modest 0.9 per cent growth from Q1 2023.
Similarly, net premium earnings increased to $64.3 million, with life insurance growing by 0.4 per cent and general insurance growing by 1.6 per cent.
The figures for Q2 and Q3 of 2024 indicated consistent positive growth, with gross premium income rising to $81.2 million and $94.5 million in Q2 and Q3, respectively.
Gross claims incurred in Q3 2024 totalled $24.4 million, up 46.8 per cent from the previous year, demonstrating both challenges and opportunities in managing risk in an expanding market.
“Today’s workshop provides us an opportunity for dialogue, collaboration and action,” Ahmad reiterated.
He believed Cambodia’s insurance sector has the potential to be a cornerstone of economic resilience and social protection. However, achieving this vision requires sustained effort, innovation and collaboration.
