British Prudential, Japanese Dai-ichi Life, Hong Kong AIA, US Chubb and Canadian Manulife have been authorised to establish wholly-owned life insurance subsidiaries.
The Ministry of Planning and Finance on April 5 published the list of foreign insurers as "preferred applicants" to operate as a life insurance company through a 100pc wholly-owned subsidiary. The announcement was originally scheduled for release on March 29.
A day after The Myanmar Times on January 1 broke news that Samsung Life Insurance had closed its Myanmar office, the government announced they would grant up to three licences to foreign companies to offer life insurance as wholly-owned foreign insurers.
Foreign investors have expressed frustration with multiple delays in the long promised liberalisation of Myanmar’s almost entirely closed insurance market.
Since 2013, 11 local insurers have been granted licenses to operate, while 14 foreign insurers have set up 30 representative offices. But none have been allowed to do business except in Thilawa where three Japanese companies were granted permission to operate non-life insurance businesses in the special economic zone - Tokio Marine & Nichido Fire Insurance, Sampo Japan Insurance and Mitsui Sumitomo Insurance.
Insurance penetration in the country is extremely low, even compared to Cambodia, Laos and Vietnam. Non-life penetration in Myanmar in 2015 stood at 0.07pc and around 0.01pc for life, giving a market total of 0.08pc, according to Swiss Re Sigma.
The finance ministry’s latest announcement suggested that if the five selected companies fulfill the pre-licensing requirements, they will be allowed to operate.
“The successful foreign life insurance companies will be required to submit an irrevocable and unconditional proposal bond of US$400,000 within 10 business days from the date of announcement,” DFDL Myanmar legal advisers Bhawna Bakshi and Rohan Bishayee commented.
Unsuccessful applicants still have the opportunity to form a joint venture with the existing local life insurance companies under the Expression of Interest by April 26, according to the Request for Proposal. The finance ministry had said earlier this week that the deadline would be May 3.
Some Thai and Japanese investors are also in talks with local potential partners, sources familiar with the matter said.
The finance ministry had committed to liberalising the insurance market in the first quarter of 2017, but the opening up was repeatedly delayed. Last December 12, U Thant Sin, director of the finance ministry’s Financial Regulatory Department, said the department would give licences to foreign insurers “within the next 16 weeks”.