News Regulations03 Jan 2019

Myanmar:Korean life giant puts up shutters at Yangon rep office

03 Jan 2019

South Korea's largest insurance company has left Myanmar as business patience runs out over the government's delay in liberalising the insurance market.

Samsung Life Insurance has stopped operating in Myanmar since last August, a representative of the Myanmar Korean Chamber of Commerce and Industry (MKCCI) confirmed to The Myanmar Times.

The Seoul-based multinational insurer opened its Yangon representative office in 2013, according to the representative.

The Myanmar Finance Ministry had committed to liberalising the insurance sector within the first quarter of 2017, but has failed to make any concrete moves. Foreign insurers from 14 countries which have set up 30 representative offices still cannot do business in Myanmar, except in the Thilawa Special Economic Zone.

“Samsung Life Insurance waited for the opening of the insurance market in Myanmar while reviewing the feasibility of doing insurance business for more than two years, but withdrew after the full opening of the insurance market was delayed,” Mr Lee Keun Jae, secretary general of MKCCI, said.

The Korean business leader urged Nay Pyi Taw not to focus on attracting new investors from abroad at the expense of those which have already established a presence in the country. He said foreign financial institutions should have been able to at least start operations by now.

16-week time frame

In a development on 12 December last year, U Thant Sin, director of the Finance Ministry’s Financial Regulatory Department, said the department will give licences to foreign insurers “within the next 16 weeks”. The government will “soon invite Expressions of Interest” and foreign players can “start operations in April or no later than May”.

He said, “If we allow foreign players in the market, we will be able to get the funds we need to develop the government bond market. We will be asking for a large amount of capital from insurance companies to buy government bonds. Once an insurance company is given a licence, 30% of their required capital should be for buying government bonds.”

The promises are not new. The authorities are reluctant to open up the market to foreign investors because they want to protect local companies against competition.


 

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