Myanmar’s financial regulator will begin granting licenses to foreign-owned insurance companies, allowing them to operate in the market by April of this year.
U Thant Sin, Director of the Financial Regulatory Department (FRD) of the Ministry of Planning and Finance (MPF), was quoted in local media as saying: “We will soon invite expressions of interest so that foreign insurers can start operations in April or no later than May.”
The MPF reports that there are currently 31 representative offices of insurers from 14 countries in Myanmar. These firms are anticipating the government’s go-signal allowing full foreign investments in life insurance and joint ventures in general insurance.
U Myo Min Thu, Managing Director of AYA Myanmar Insurance, believes that foreign competition is important in order to develop Myanmar’s insurance industry.
U Myo says: We need more competition to be able to provide better services. Because we lack human resources and skills, foreign insurance providers can help to fill this gap with technical know-how. This will help us produce better quality products and distribution channels.”
U Thant Sin from the FRD added that the opening up of the insurance sector to foreign investment would also deepen the bond market and provide additional fund sources for the government.
“If we allow foreign players in the market, we will be able to get the funds we need to develop the government bond market,” he said, adding that “we will be asking for a large amount of capital from insurance companies to buy government bonds.”
“Foreign insurers will need to invest $14 million USD for a license to provide general insurance. Once the insurance company is given the license, 30% of their required capital should be allocated to buying government bonds.”
Meanwhile, the Myanmar Investment Commission has introduced its Myanmar Investment Promotion Plan to promote investments that will assist in the development of the economy, institutions, infrastructure, industries and human resources in the country. Under the plan, Myanmar plans to attract $200 billion USD during the next 20 years to 2036.