Health insurance to debut this year

“The service will be available within this year but the exact timing is not finalised yet. We are working to speed things up. Research will be conducted for setting insurance premiums and compensation. This service will be on a one-year trial run,” said the minister, who is also chairperson of the Insurance Business Supervisory Board.

After the test-run, insurance policies will be improved to fit the local requirements. 

A special task force will be formed to draw up health insurance policies. The task force will include representatives from Ministry of Health, Myanmar Medical Association and private insurance companies, as well as foreign experts from international insurance providers.

In 2012, for the first time in more than 50 years, 12 private insurance companies were given conditional approval to start operating by the Myanma Insurance and the Insurance Business Supervisory Board (IBSB). They were allowed to offer service in the second half of last year. Three firms offer only life insurance, while the others, such as Grand Guardian, also offer non-life insurance products. Before that, the service was monopolised by state-run Myanma Insurance. 

Some foreign companies have also opened representative offices in Yangon, but their services are limited to consultation. It was reported that foreign insurers would be granted licenses in 2015, when local companies are expected to be relatively strong enough to preserve their market shares.

 

AIA Group, Prudential and Singapore’s Great Eastern are among the foreign players which have made presence felt in the country. 

Prudential, the first European life insurer in Myanmar, has a long history in Asia and its involvement in Myanmar dates back to 1923 when it had an office based on Strand Road in the former capital, Rangoon. Its re-entry into the market is in step with the growing international support for Myanmar’s efforts to reintegrate with the international community, the company said in a statement when the office was opened last November.

“We are excited to be expanding our footprint to Myanmar. We see immense potential in this country as it continues to reform and progress its economic growth. Prudential is committed to the long-term development of the insurance sector and the capital market in the country. We will offer our expertise to support the Myanmar government’s efforts to develop the financial services available to its people,” Barry Stowe, chief executive of Prudential Corporation Asia, said then. 

In March, Great Eastern group chief executive Chris Wei told the Straits Times that his company will help the Myanmar government to study a health insurance model for the country. 

“The government is very proactive in studying health insurance. For a start, we will be providing training support, and to be considered a subject matter expert to Myanmar insurance as well as the financial regulator as they look to define a model that works for this government.”

Its training plans include providing know-how to the state-owned Myanma Insurance, said Wei, adding that Great Eastern is likely to provide input to a government panel that is studying the future model of health insurance for the country.

He said: “It’s a much more systemic review, not just studying the insurance products. That’s one component of a broader review that will include the Ministry of Health, the medical association, the financial services industry and so on.”

On the pending licence, he said “As and when they feel the timing is right and they find a model that works for them, in terms of inviting foreign participation, then hopefully we will be first in line for them to consider us.”

Aung Zaw Naing, Shwe Taung group chief executive and Grand Guardian vice-chairman, welcomed Great Eastern’s entry. 

“The first thing we can learn from their experience ... is to shape the life insurance sector of Myanmar into one with proper foundation.”

He noted that out of Myanmar’s population of 60 million people, only about 0.1 per cent have life insurance coverage.

“It’s not about who reaches there first but how we can educate the population together, so I don’t see the foreign insurers as competition, but as a strength to the Myanmar industry.”