The government of Myanmar has announced that it will welcome five global insurance companies – which includes Canadian insurer Manulife – to establish wholly-owned subsidiaries in the region.
Myanmar’s Planning and Finance Ministry initially announced that only three foreign companies would be provisionally authorized to operate in the region, but a more recent statement has increased the number to five.
Aside from Manulife, the other insurers that have been approved by the Southeast Asian country are Prudential, Dai-ichi Life Holdings, AIA, and Chubb.
Nikkei Asian Review reported that Myanmar’s decision to welcome the five companies marks the first time that its heavily-state-controlled economy has permitted foreign ownership in its insurance market. As of 2017, Myanmar’s life insurance premium revenue was only at $13 million. Previously, the government held a long monopoly over the state’s insurance business, only recently opening the market to private companies in 2013.
The government also said that it would issue business licenses to foreign insurers, allowing them to open representative offices. But officials only introduced license application procedures earlier this year as preparing the criteria for screening applicants took longer than they had expected.
According to a forecast by Dai-ichi, Myanmar’s insurance market will expand nearly a hundred times over to $1.3 billion in just a decade following the market’s opening.
The five companies are expected to start operating in the country by the end of 2019, following procedures for the establishment of subsidiaries and other requirements.
Myanmar has also revealed that, by May, it will also select other foreign insurers to form joint ventures with local providers under a 35% ownership restriction.