Insight Report: Nascent Insurance Markets and Opportunities for Foreign Insurers

Synopsis
The report covers nascent insurance markets and provides:
Insights into the Cambodian, Cuban and Myanmar insurance industries.
Detailed analysis of various factors driving growth in the insurance industries in Cambodia, Cuba and Myanmar, and different challenges posed by these economies.
Comprehensive analysis of the demographic and economic structures of these countries.
Insights of existing regulatory standards in these economies for foreign participation, non-admitted insurance, compulsory insurance and prudential standards.
Analysis of various opportunities and challenges for foreign insurers in Cambodia, Cuba and Myanmar. 

Summary
Insurance markets in developed countries are mature, with limited scope for growth. Insurers operating in these markets are therefore looking to new regions to expand and diversify. A nascent insurance market is one that is small and newly developing, and those that have been opened for foreign investment offer significant opportunities to foreign insurers. 
Myanmar - Asia's final frontier economy
Myanmar, described as the last frontier economy of Asia, began the conversion to a free market economy when its first elected democratic government came to power in March 2011. The new government ended decades of military junta rule and isolation from the rest of the world. As a part of economic liberalization and economic reforms, the new government opened its insurance industry to private insurers in 2012 and is expected to open the market to foreign insurers in 2015. In 2012, the government authorized 12 domestic insurers to establish insurance businesses in the country. These insurers will complete their first year of operation in 2014.
Myanmar has the potential to generate US$1.6 billion of insurance premium every year, as estimated by Reuters and is expected to grow rapidly over the coming years. According to Asia Insurance Review's projections, total insurance premiums generated in the Myanmar insurance industry are expected to reach US$2.8 billion by 2030. Foreign insurance giants are eager to enter Myanmar and have begun preparations to enter the market when it is opened for foreign investment. Early movers will be responsible for developing Myanmar's insurance industry and should benefit from large shares of the billion-dollar market. 
The untapped insurance industry of Cuba
The insurance industry in Cuba was opened for private participation and foreign investment in 1997 under free-market economic reforms initiated by Fidel Castro's then-communist government. However, with the high level of political risk, the Cuban insurance industry is yet to be explored by foreign insurers. Only state-owned bodies such as Esicuba SA, Esen, Asistur SA and Heath Lambert de Cuba SA operate in the country.
The political and economic scenario in Cuba began to change when Raul Castro succeeded Fidel Castro to lead the communist government in 2008. From 2011, Cuba's centrally planned socialist economy began the gradual journey to becoming a free market economy. The government eased out state control in many industries and permitted self-employment in 178 economic activities. Private participation in the economy significantly increased personal wealth and gross national savings, creating increased demand for insurance. Economic reforms are expected to boost GDP growth, which has growing by 2-3% annually since 2010. The gradual economic liberalization is expected to encourage foreign insurers to explore the untapped insurance market in coming years. 
Beginning of a new life insurance market in Cambodia
Cambodia ended decades of economic isolation in 2000, when it made the transition to a free market economy. This followed bold economic reforms and economic liberalization, which triggered rapid growth over the next decade. The non-life insurance segment was formally established in the country in 2003 with the entry of private insurers. It grew rapidly during its initial phase of development and generated premiums of US$35.6 million in 2012. The Cambodian insurance industry has substantial potential for growth and is expected to continue to grow over the next decade to become a US$200.0 million industry by 2023. As of May 2014, six non-life insurers operated in the segment.
The life insurance segment in Cambodia formally started in 2012 with the establishment of the state-owned life insurer Cambodian Life Insurance Company followed by foreign life insurers Manulife and Prudential. The untapped market has the potential to generate around US$80-90.0 million within a decade. Cambodia is an attractive investment opportunity for multinational insurers and more are expected to enter the market in the next five year. 
Scope
 This report covers growth opportunities in three nascent insurance markets: Cambodia, Cuba and Myanmar.
The private insurance industries in Cambodia, Cuba and Myanmar are new, and offer significant opportunities for foreign insurance companies.
The report analyzes key factors driving growth in the insurance industries in Cambodia, Cuba and Myanmar, and various risks associated with these economies.
The report also analyzes key socio-economic factors, and the regulatory environments of these economies.  
Reason To Buy
 Gain insights into the nascent insurance markets of Cambodia, Cuba and Myanmar, which are untapped and offer a huge growth potential
Assess the growth potential of these markets, and the opportunities for foreign insurance companies
Understand various factors driving growth in the insurance industry, and different challenges posed by these markets
identify various approaches to enter these markets, and capitalise on the available opportunities 
Key Highlights
 The Myanmar insurance industry was opened to private operators in late 2012. In an effort to establish a private insurance market in the country, in September 2012 the IBSB granted conditional approval to 12 of 20 applicants intending to carry on insurance business in the country. Of these, three intend to provide only life insurance services and nine intend to operate both life and non-life insurance business.
The government in Myanmar is yet to permit FDI in the insurance industry. Domestic insurers will be given one to two years to establish themselves before the market is opened to foreign insurers. This will enable domestic insurers to compete with foreign insurers once the industry is opened up. The government is expected to permit FDI from 2015 onwards.
According to Reuters' estimates, based on economic data and benchmarking with neighboring countries, Myanmar has the potential to generate MMK1.3 trillion (US$1.6 billion) of insurance premium revenue every year. The Asia Insurance Review projects that the Myanmar insurance industry is expected to generate MMK2.4 trillion (US$2.8 billion) of insurance premium in 2030. 
A private insurance market is yet to be established in Cuba and it is difficult to estimate its size. The state-owned Esicuba SA generated a total gross written premium of CUP99.8 million (US$4.2 million) in the financial year ending December 2011, with annual growth of 29.3% over the CUP77.2 million (US$3.2 million) gross written premium generated in 2010. However, the industry has the potential to generate substantially greater revenues.
The life insurance segment in Cambodia formally started in 2012 with the establishment of the state-owned life insurer Cambodian Life Insurance Company followed by foreign life insurers Manulife and Prudential. The untapped market has the potential to generate around US$80-90.0 million within a decade.
The non-life insurance segment was formally established in Cambodia in 2003 with the entry of private insurers. It grew rapidly during its initial phase of development and generated premiums of US$35.6 million in 2012. The Cambodian insurance industry has substantial potential for growth and is expected to continue to grow over the next decade to become a US$200.0 million industry by 2023.