Page 25 - Insurance Times August 2020

IRDAI Act 1999 notified the Reinsurance Regulations on 30 situation for the insurance industry of Myanmar which has
Nov 2018. In recent years, India has been developed as ample opportunities for growth as well as need of the hour
reinsurance hub in Asia. International Financial Service to develop adequate capacity in Myanmar along with
Center (IFSC) first of its kind in India has already been business opportunities for reinsurers.
operational &big insurance players like GIC Re, The New
India Assurance Co. Ltd & Export Credit Guarantee Conclusion
Corporation of India (ECGC) have already been operational
Opening of Myanmar Insurance market shall help the
in IFSC at GIFT City, Gujarat. More than 10 foreign reinsurers
reinsurers to unleash huge potential of Myanmar. Economy
including Lloyds have already opened their offices in India.
of Myanmar is picking up and has potential to achieve
growth of 8% of GDP and may quadruple its economy over
Thus taking cue from Indian reinsurance industry, Myanmar
200 Billion $ by 2030 opines McKinney Global report.
insurance shall garner huge benefit in reinsurance which will
Banking services are severely limited but now number of
help in building confidence in financial system of the country,
foreign banks have also been allowed to transact business
better risk management in coming years. These guidelines
in Myanmar. This shall be game changer for banking and
shall develop adequate capacity within Myanmar
insurance services coupled together which will augment&
simultaneously open the market to CBRs. With opening up
boost financial inclusion and stability in the region.
of market, each and every insurer licensed in Myanmar can
design its own reinsurance programme and shall seek best
In addition to framing reinsurance guidelines, time has come
terms with FRBs and CBRs which was earlier restricted to
where IBRB need to set guidelines and promote 'interests
Myanma Insurance.
of policy holders, setting up mechanism for improvement in
turnaround time (TAT) for various insurance services to boost
This will help insurers to broaden their reinsurance base to
insureds confidence in financial system, steps to build up
build up capacity and to use reinsurance as an effective tool
capacity and education in insurance sector to cater the need
to stabilise Profit & Loss, balance sheet volatility. Myanmar
of fast growing industry.
reinsurance directive mandates minimum retention of life
insurance business shall be 20% and this minimum retention With the opening of insurance market, it is envisaged that
is justified as insurance industry is in tender stage and need Myanmar's economy has good medium- and long-term
time to grow. 10% obligatory cession to Myanma Insurance prospects. The economy will keep growing due to
shall leverage the Myanma Insurance to develop its capacity accelerated reform implementation, huge infrastructure
and broaden its base for future expansions. In long term, spending and investment and liberalisation of banking and
Myanma Insurance shall gain experience and confidence for insurance. Japanese insurance company Dai-Ichi forecasted
handling diversified insurance portfolio by the provisions of that insurance sector in Myanmar is expected to grow 100-
this directive. fold, to $1.3 billion, over the next decade.

In order to develop reinsurance capacity in Myanmar, There is no perfect reinsurance programme nor permanent
different types of pool and alternate risk transfer method one. Reinsurance programs are customised options which need
shall also need to be developed. Various types of insurance continuous monitoring and assessment for effective outcomes.
pools required immediate set up as geographically Myanmar Opening the gates to reinsurers is the right move as economy
is disaster prone and adequate reinsurance arrangements of country is shifting from agrarian to industrialisation and
will help to manage peak & troughs of large claims of service sectors. Reinsurers will not only bring additional capacity
insurance companies. Foreign Reinsurer's Branches (FRBs) in the region and narrow the protection gap of the country by
as well as Cross Border Reinsurers (CBRs) shall exploit the increasing insurance penetration but also provide better risk
opportunity to tap the uninsured assets of the country with management services.
its experience and capacity to exploit opportunities available
in the region. Reference:
Different contemporary regulations, discussions &
Issuance of reinsurance guidelines by IBRB is advanced step information as collected and collated from various text
and liberalisation of Myanmar Insurance market is win-win materials available on-line & in hard copies. T

The Insurance Times, August 2020 25