A selection committee led by Deputy Minister for Finance and Planning U Maung Maung Win has been formed to issue licences to foreign insurance companies that have opened representative offices in Myanmar.
“The date of issuing licences to foreign firms is yet to be set,” U Thant Zin, the director general of the Financial Regulatory Department under the Ministry of Finance and Planning, told Frontier Myanmar.
He said that a roadmap for market liberalisation has been drafted and approved by the government. However, he refused to give details of the roadmap and said they would not be made public for now. More information would be released only when foreign insurers are granted licences, he added.
“The IBRB has been in talks with players since earlier this year about market liberalisation,” he said, referring to the Insurance Business Regulatory Board, on which he serves as Secretary.
In 2012, state-run Myanma Insurance lost its monopoly and the government announced plans for liberalisation in the insurance sector. Myanma Insurance granted licences to 12 domestic firms, which entered the market in 2013.
For now, the market remains immature and fragile due to tight restrictions that domestic insurers say are inhibiting competition. “Due to the restrictions, we can only sell the same products at the same prices with the same benefits,” said U Myo Min Thu, Managing Director of AYA Myanmar Insurance.
Foreign companies, meanwhile, are waiting to learn if they will be permitted to operate on their own or be required to form joint ventures. A total of 24 foreign insurance companies, including 10 life insurers, seven general insurers and seven brokers, are waiting to receive operating licences.
Three Japanese firms have been granted permission to conduct business but only in the Thilawa Special Economic Zone.
Thant Zin said regulators have already made a decision on whether to allow foreign insurers to set up fully owned subsidiaries, or require them to partner with local firms in a joint venture. He declined to reveal what they had settled on, but said it came following months of consultations with domestic and foreign insurers. “We just need to make a decision about which foreign firms should be licensed to begin the second wave of liberalisation,” he said.
In April, Aon estimated that in 2015 there were US$46 million in gross written premiums, and it forecast that with an “increasingly open, competitive market”, the non-life sector could rise to $1.4 billion by 2030, and the life sector to $900 million over the same period.