It was
only when Aye Aye Nge's pharmacy burned down for the second time that she
thought about taking out insurance, a novelty in impoverished Myanmar where
most people either can't afford to buy premiums or don't trust those selling
them.
The two
blazes -- one in 2010 and then in January this year -- gutted much of the
bustling Mingalar market in downtown Yangon, taking with it two shops and
valuable stock belonging to the 73-year-old.
"I
thought there couldn't be a fire accident again after the first one," she
told AFP from her tiny new store on the fourth floor of a nearby building where
the market has moved. "I am going to buy insurance," she added.
"I must do it. I have lost (everything) twice already and am afraid of
losing it all again."
Decades
of brutal, corrupt and economically inept military rule left Myanmar's people
with a deep distrust of state-run institutions.
Many
people chose to hide or bury their savings rather than deposit them in a bank.
For 50
years until 2013, the only insurance company in the country was a state-run
monopoly after the junta closed down all rivals.
But the
country's dramatic transformation from military to civilian-led rule, capped by
last November's elections that spurred Aung San Suu Kyi's party to power, has
begun to shift the fortunes of the economy. The values and aspirations of
Myanmar's people are also changing.
Insurance
firms are gambling that as people get richer, they eventually will do more to
protect themselves -- and their assets -- in a country prone to natural
disasters and with near non-existent health and safety standards.
Investment
has flooded in and the country's largest city Yangon is now filled with cranes
and cars plying traffic choked streets.
But
according to the government, just five percent of the country's 600,000 drivers
have any sort of insurance.
Likewise,
few of the shop owners around the bustling Shwe Mingalar market have taken out
protection measures, despite losing thousands of dollars in the recent fires.
After
decades of junta rule, insurance is simply not a priority to the public.
"They are not interested at all," admits Htay Paing, the deputy
managing director of Grand Guardian Insurance Public, one of a host of new
insurance companies.
Management
consulting giant McKinsey believes the economy, if managed properly, could
quadruple from $45 billion in 2010 to $200 billion by 2030. That should be a
boon to insurers. "The (potential) market is very big, it's true that it's
a virgin market," Htay Paing said.
Until
2013 the only insurer allowed to operate in the country was Myanma Insurance,
which offered a limited number of products -- including protection against
snake bites in a country where the mortality rate from such incidents is twice
as high as the world average.
Competitors
have since been allowed in alongside a handful of foreign companies.
"There's
absolutely huge potential in Myanmar, it's a nearly untapped market," an
employee of a large western insurance broker who regularly travels to Myanmar
told AFP, asking not to be named.
"But
there's currently very little culture of taking out insurance and the state
still dominates the industry," he added.
Under
current rules, private insurers are still limited to offering just 11 products,
largely life, health and car insurance. Myanma Insurance is able to offer more
products, often at a cheaper premium.
But
companies are nonetheless jostling to get a head start in the hopes that
regulations will be further relaxed. So far 22 foreign firms have been granted
licences with Japanese companies leading the way -- three have been granted
concessions to sell products inside a newly opened special economic zone.
The
rewards for those who get in early could pay off.
Asia
Insurance Review, a website monitoring the regional market, believes Myanmar's
sector could be worth as much as $2.6 billion by 2030. Meanwhile, US giant
MetLife, which opened up a Myanmar office in 2013, has estimated that the life
cover market alone could grow from just $1 million in 2012 to $1 billion in
2028. Car insurance is one area already seeing growth.
AFP
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