Building blocks for bancassurance set to grow in Myanmar

The Ministry of Finance, Planning, and Industry’s Financial Regulatory Department has approved a plan by two insurance joint ventures to offer bancassurance products under a pilot project following the liberalisation of the insurance industry in Myanmar.

KBZ MS is a joint venture insurance company between between IKBZ Insurance and Japanese insurer MSI, while AYASOMPO is a joint venture between AYA Myanmar, and Japanese insurer Sompo. Bancassurance is the selling of life assurance and other insurance products and services by banking institutions.

Since the liberalisation of the market in 2019, some local insurers along with their foreign partners have been considering bancassurance as another option to serve the country’s insurance needs.

Based on 2016 analysis by The Foundation for the Advancement of Life and Insurance Around the World, the distribution share of bancassurance in selected countries represents 42.2 percent, and given the recent growth of bancassurance, the distribution share might converge to 50pc in the future, according to research commissioned by local insurer KBZ MS.

This means that 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. During its launch in December 2019, KBZ MS shared that its strategy for this year will focus on building new acquisition channels such as an extensive network for bancassurance and also recruitment and training of financial advisers.

The pilot project shows that Myanmar bancassurance even in its initial stages can produce figures of 10 policies per sales person per month compared to AXA Mandiri of Indonesia which set the best in region with 8-10 monthly polices sold per branch per month.

Bancassurance is an exciting new channel for banks in Myanmar that can generate significant incremental income and in the next five year.

Source: Myanmar Times

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