Cambodia’s insurance industry, a relatively young sector in the Kingdom’s economy, recorded a modest gross premium income of nearly $350 million in 2024, reflecting a growth of just 1.31% compared to the previous year. This sluggish performance, as detailed in a recent report by the Insurance Regulator of Cambodia (IRC), underscores the broader challenges posed by global economic stagnation and domestic structural issues. With total industry assets valued at $1.1 billion and a diverse landscape of 18 general insurance companies, 14 life insurance firms, 7 micro-insurance providers, 1 reinsurance entity, and 20 brokers, the sector holds potential but struggles to gain significant traction amid a complex economic backdrop.
The IRC report, released on 3 February, highlighted that the total gross premium income for 2024 stood at $346.6 million, a marginal rise from $342.44 million in 2023. While this increase signals some resilience, it also reveals the limitations of an industry still in its infancy compared to more mature markets in developed economies, where insurance has been entrenched for centuries. In Cambodia, the sector has only been active for about two decades, a point raised by Youk Chamroeunrith, director of the Forte Group, who noted the relative newness of the industry as a factor in its slow growth.
Global and Local Economic Headwinds
Economic researcher Hong Vanak of the Royal Academy of Cambodia, speaking to The Phnom Penh Post on 4 February, linked the tepid growth in premium income to a combination of external and internal factors. “The gross premium income in the insurance sector is closely linked to the global economic situation, as well as some internal economic factors,” he said. Global economic stagnation has led to reduced foreign investment flows into Cambodia, hampering business launches and expansions. As a result, fewer individuals and companies are purchasing or renewing insurance policies, with some local businesses facing financial strain severe enough to abandon coverage altogether. 
Beyond the global downturn, geopolitical tensions and crises—such as the ongoing Russia-Ukraine conflict, instability in the Middle East, and the lingering effects of the Covid-19 pandemic—have contributed to economic uncertainty worldwide. Chamroeunrith emphasized that such conditions inevitably lead to declines in cash flows and investment, which in turn affect sectors like insurance that rely heavily on economic stability and consumer confidence. When disposable incomes shrink and businesses prioritize survival over risk management, insurance becomes a lower priority for many.
Domestically, structural challenges within Cambodia’s economy and society further complicate the picture. Vanak pointed to the role of social services like the National Social Security Fund (NSSF), which provides an alternative to private health insurance for some Cambodians. As more individuals opt for NSSF coverage over private policies, the demand for traditional insurance products may be diminishing in certain segments of the population. This shift, while beneficial in terms of broadening access to social protections, poses a challenge for insurers seeking to expand their customer base.
Limited Awareness and Access
Another significant barrier to growth in Cambodia’s insurance sector is the limited public awareness and access to information about insurance services. Despite efforts by industry players to educate potential customers, many Cambodians remain unfamiliar with the benefits and mechanisms of insurance, particularly in rural areas where financial literacy levels are often lower. Vanak noted that this lack of understanding contributes to the sector’s inability to achieve more robust growth, as potential customers may not see the value in purchasing policies.
The structure of the insurance market itself also plays a role in shaping outcomes. Chamroeunrith highlighted the three main categories of insurance in Cambodia—general, life, and micro-insurance—with micro-insurance currently showing the strongest performance. Designed to cater to low-income individuals with policies starting at as little as $1, micro-insurance has gained traction as an accessible entry point for many Cambodians. However, because the premiums and coverage amounts are small, this segment’s success does not translate into significant boosts for the industry’s overall financial figures. While it represents an important step toward financial inclusion, micro-insurance alone cannot drive the kind of growth needed to elevate the sector to the level of more developed markets.
Comparative Context and Historical Perspective
To understand Cambodia’s insurance industry in a broader context, it is useful to compare it with other Southeast Asian nations. In countries like Thailand and Vietnam, where insurance markets are more established, penetration rates—the percentage of the population with insurance coverage—are significantly higher. Thailand, for instance, has benefited from decades of regulatory reforms and public-private partnerships that have fostered trust in insurance products. Vietnam, meanwhile, has seen rapid growth in life insurance due to a burgeoning middle class and increasing awareness campaigns by insurers.
Cambodia, by contrast, is still grappling with the legacy of its turbulent history, including the Khmer Rouge era, which disrupted economic and institutional development for decades. The late start in building a modern financial sector, including insurance, means that Cambodia is playing catch-up. The sector’s total asset value of $1.1 billion, while notable, pales in comparison to regional peers, reflecting both the smaller size of the Cambodian economy and the relative immaturity of its financial systems.
Historically, the growth of insurance in any economy is tied to urbanization, industrialization, and rising incomes—factors that create both the need for risk management and the disposable income to afford it. Cambodia has made strides in these areas over the past two decades, with Phnom Penh emerging as a bustling hub of commerce and development, as evidenced by its evolving skyline. Yet, the pace of economic transformation has not been uniform across the country, with rural areas lagging behind urban centers in terms of income growth and access to financial services.
Future Prospects and Conditional Analysis
Looking ahead, the trajectory of Cambodia’s insurance sector will likely hinge on both global economic recovery and targeted domestic reforms. Vanak expressed cautious optimism, suggesting that premium incomes could rise if global and local economic conditions improve. An uptick in foreign direct investment, for instance, could stimulate business activity and, by extension, demand for insurance products. Similarly, a resolution to current geopolitical conflicts might restore confidence in global markets, benefiting peripheral economies like Cambodia’s.
If the government and industry stakeholders prioritize public education campaigns, there may also be potential to increase awareness and uptake of insurance among the population. Such initiatives, if paired with incentives like tax breaks for policyholders, could encourage more Cambodians to view insurance as a necessary component of financial planning rather than a luxury. However, it must be noted that these outcomes remain speculative and dependent on a range of variables, with no guaranteed timeline for improvement.
On the regulatory front, strengthening oversight and consumer protections could build trust in the sector, addressing concerns about policy reliability and claims processing that may deter potential customers. While the IRC has made efforts to stabilize and grow the industry, further reforms—if implemented effectively—might create a more conducive environment for insurers to innovate and expand. Again, these possibilities are conditional and would require sustained commitment from both public and private actors.
Challenges of Perception and Trust
Beyond economic and regulatory factors, the issue of trust remains a critical hurdle. In many emerging markets, including Cambodia, skepticism toward financial institutions can stem from past experiences of instability or exploitation. For the insurance industry to flourish, it must overcome these perceptual barriers by demonstrating transparency and reliability. High-profile cases of insurers failing to honor claims or engaging in opaque practices can have a disproportionately negative impact on public confidence, particularly in a market where word-of-mouth plays a significant role in shaping opinions.
Moreover, cultural attitudes toward risk and planning may also influence insurance uptake. In some Cambodian communities, traditional mechanisms of mutual support—such as family or village networks—may be seen as sufficient for managing unexpected events, reducing the perceived need for formal insurance. Shifting these cultural norms will require not only education but also products tailored to local needs and values, a process that could take years if not decades.
Conclusion: A Sector at a Crossroads
Cambodia’s insurance industry stands at a crossroads, caught between the promise of growth and the realities of economic and structural constraints. With a gross premium income of $346.6 million in 2024, the sector has shown resilience in the face of global challenges, but its modest 1.31% growth rate highlights the scale of the obstacles ahead. From global economic stagnation to limited public awareness, the factors holding back progress are multifaceted and interconnected.
For now, stakeholders can take heart from the relative success of micro-insurance, which offers a pathway to greater financial inclusion even if it does not yet transform the industry’s bottom line. As Cambodia continues to urbanize and integrate into the global economy, the demand for insurance is likely to grow—provided that the right policies, investments, and educational efforts are in place. Until then, the sector remains a work in progress, emblematic of a nation striving to balance its historical challenges with aspirations for a more secure and prosperous future.
