Validation Workshop on “Inclusive Insurance and Risk Financing in Cambodia”

Welcome Remarks by Mr. Shakeel Ahmad, Deputy Resident Representative, UNDP Cambodia

January 29, 2025
a group of people sitting in front of a crowd

•    Dr. HOR Sovathana, Deputy Director General of Insurance Regulator of Cambodia
•    Excellencies, Ladies and Gentlemen
•    Distinguished Guests,

Good morning, Chom reap sour!

It is with great pleasure to welcome you to today’s validation workshop on the Inclusive Insurance and Risk Financing diagnostic in Cambodia. We are very pleased to collaborate with the Insurance Risk Regulator Cambodia (IRC) and all of you on this initiative which aims at strengthening financial resilience, mitigating risks, and promoting sustainable development in Cambodia.

In today’s world, interconnected risks such as economic uncertainties, climate change, and health crises increasingly challenge our resilience. Inclusive insurance and risk financing are essential tools in this context. They play a critical role in protecting lives and livelihoods, ensuring swift recovery, and preventing individuals and communities from falling into vicious cycles of poverty. For Cambodia and elsewhere, where natural disasters, economic shocks, and other risks disproportionately affect poor and vulnerable populations, particularly those living in rural areas and dependent on agriculture, insurance coverage remains critically low. In 2023, the Cambodian insurance market was at 344 million US dollars, with an insurance penetration of 1.16 percent of the GDP and an insurance density of around 21.02 US dollar per person. This penetration rate remains relatively low compared to the world average of 6.3 percent. However, we are pleased to acknowledge that the Royal Government of Cambodia is aware of this challenge and is pursuing a long-term goal of increasing the insurance penetration rate in the country to 5.5 percent by 2030.

Excellencies, Ladies and Gentlemen!

The preliminary findings from the diagnostic study that will be presented today underscore that while Cambodia’s insurance market has made strides, significant gaps persist in reaching rural areas and low-income communities. Microinsurance could therefore be a good instrument to close this gap. These should be insurance products which could provide affordable, accessible financial protection to those who need it the most. For example, farmers facing unpredictable weather, small businesses coping with market disruptions, and families striving for stability in uncertain times.

UNDP has been at the forefront of global efforts to develop insurance and risk financing solutions. Our work includes partnerships with initiatives such as the Insurance Development Forum, InsuResilience Global Partnership, and the Ocean Risk and Resilience Action Alliance. These initiatives aim to embed insurance into broader development and resilience strategies, ensuring alignment with the Sustainable Development Goals (SDGs).

We believe this diagnostic study represents an important milestone in understanding the landscape of inclusive insurance and risk financing in Cambodia. The study will help us identify challenges, opportunities, and pathways to strengthen Cambodia’s insurance sector. It will provide a foundation for innovative solutions, such as leveraging digital platforms, public-private partnerships, and customized microinsurance products, that can enhance targeted actions to address gaps in access, affordability, and trust and awareness.

Today’s workshop provides us an opportunity for dialogue, collaboration, and action. Besides your valuable inputs into the diagnostic study, we also look forward to your engagement in creating a robust ecosystem that not only addresses gaps in the insurance market but also ensures that every Cambodian has access to financial protection. Cambodia’s insurance sector has the potential to be a cornerstone of economic resilience and social protection. However, achieving this vision requires sustained effort, innovation, and collaboration.

In closing, we would like to acknowledge the leadership of H.E. Bou Chanphirou, Director General of the Insurance Regulator of Cambodia, and his team in advancing this agenda. The IRC’s efforts in enhancing regulatory frameworks and promoting market stability are critical to achieving our shared goals.

I encourage you to actively participate in today’s discussions, share your insights, and contribute to shaping actionable recommendations. Together, we can ensure that the benefits of insurance and risk financing reach every corner of Cambodia - creating a society that is more resilient, equitable, and prepared for future turbulence.

I would like to express my heartfelt gratitude to all of you for your participation and wish you all a fruitful and insightful discussion.

Thank you, Som Arkun!