Myanmar has approved six joint ventures between local insurers and five companies from Japan and one from Thailand as the government moves to attract foreign investments and grow the country's under-penetrated insurance industry, according to an announcement of the Ministry of Planning and Finance.
The approved life insurance tie-ups are between Capital Life Insurance and Tokyo-based Taiyo Life Insurance Co; Citizen Business Insurance and Bangkok-based Thai Life Insurance; and Grand Guardian Life Insurance Co and Osaka-based Nippon Life Insurance.
The non-life joint ventures are between AYA Myanmar General Insurance and Tokyo-based Sompo Japan Nipponkoa Insurance; Grand Guardian General Insurance Co and Tokyo-based Tokio Marine & Nichido Fire Insurance; and IKBZ Insurance Co and Tokyo-based Mitsui Sumitomo Insurance Co.
According to MOPF's 2017 Statistical Yearbook, Myanmar's insurance industry recorded 56.75 billion kyat ($37.54m) of premiums between April 1, 2016 and March 31, 2017.
Myanmar authorities believe that allowing foreign companies to open up business in the insurance sector will increase insurance and protection to foreign investors coming into the country. Currently, only 86 in 1,000 people have insurance in Myanmar, officials said.
Japanese insurance company Dai-Ichi has forecast the sector will expand 100-fold, to $1.3bn, over the next decade, according to Nikkei Asian Review. Even then, it would still be relatively small; insurance premiums in Vietnam were estimated at $5.75bn last year.
However the negociations have not run smoothly. According to a report by Nikkei, which cited insiders, local insurers decided to pull out of talks with Thailand's Muang Thai Insurance and Muang Thai Life Assurance, and South Korea's DB Insurance, after learning that they were only allowed to set up the joint ventures by buying newly issued shares of local insurers instead of existing shares, as previously communicated.
So far, some 1,200 agencies have been granted licenses by the Insurance Business Regulatory Board with comprehensive motor insurance, fire insurance, life insurance, health insurance and traveling insurance topping the lists.