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Why Businesses Need Insurance

There is saying: “When you have one thing, you have one thing to lose.” It means that if we have a house, there is a chance we might lose that house. So how can we cover this risk? This is what insurance companies exist for. Some risks cannot be controlled. They can only be transferred. Now, Myanmar people are exposed to taking insurance as the Myanmar Insurance Industry is growing rapidly. Some people said it can be seen as a booming sector in the country. There are so many changes and development since after the government liberalized the market. Previously, Myanma Insurance (State Owned) controlled almost every policy, product development and others even though there were local private insurance companies. But now, many insurance companies can reach out to people and businesses with their insurance products, packages and services. 

In the history of Myanmar’s insurance sector, the industry was closed for decades but it is now open and liberalised. The market was operated as the Uni-Polar Market by Myanma Insurance since 1952, but in 2012, the government allowed 12 private insurance companies and made them operational within six months and significant changes began. Foreign insurance firms have started operating in the country either as Joint Venture or as 100% wholly owned subsidiaries later these days. So there are many choices. 

New Dynamics in Insurance Market

Actually, before fully liberalization of the market, insurance products were developed only by Myanma Insurance. But now, according to “INTO MYANMAR Insurance Summit 2019”, products are going to be developed from the perspectives of market needs, policyholder protection, and actuarial science.  Therefore, there will be many choices of insurance products in the market. Also, businesses in the country have begun to consider the benefits of having insurance. 

Myanmar insurance companies provide Group Life Insurance. According to “AMI Insurance”, wellbeing of employees is extremely important for an organization to be successful.

As I mentioned above, when we have ‘something’, there is a chance we may lose that ‘something’ one day. According to “iEduNote,” there are 6 important reasons why businesses should have insurance; 1. The uncertainty of business losses is reduced. 2. Business efficiency is increased with insurance. 3. Key man indemnification. 4. Enhancement of credit. 5. Business continuation. 6. The welfare of employees. Although there are many insurance products in the market, some of them like Comprehensive Motor Insurance, Fire Insurance, Cash in Safe Insurance, Cash in Transit Insurance, and Group Life Insurance, are common among the insurance companies. 

First and foremost insurance for the businesses is Fire Insurance, the policies of which changes slightly depending on the insurance companies. Fire Insurance policies provide the following covers: building, stocks and other contents, machinery, movable and immovable fittings, tools, furnishings and fixtures within the premises. Benefits can be separated as “Total Loss” and “Partial Loss”, and the period of the term can differ from ten days to one year. The interesting part is “Additional Cover,” in which customers could be covered risks from Riot and strike, Malicious damage, Earthquake shock, earthquake fire and volcanic eruption, Explosion, Storm, typhoon, hurricane, tempest and cyclone, and War risks. These risks can be easily covered by paying additional premiums. 

Insurance and Employee Motivation

Myanmar insurance companies provide Group Life Insurance. According to “AMI Insurance”, well-being of employees is extremely important for an organization to be successful. Organization must look after not only their employees but also their families so that employees will be motivated and resulting in higher productivity. So, how can an organization have those “important well-being employees”? GGI Insurance said “This insurance ensures financial protection for employees and their families. So we can say providing Group Life Assurance cover for employees is indeed a goodwill act of the employer. What’s more, this insurance helps cement trust between the employer and employees which indeed is the cornerstone of uplifting corporate Social Responsibility.” So, what risks does it cover? It covers employees or members of the organization against any economic loss for their families caused by death, permanent disability or injury of the insured employees. This coverage could, also, be considered as part of the benefits for employees to work with a peace of mind.

Insurance for Drivers

“Comprehensive Motor Insurance”, the most popular one in the country, comes with the adjective “Comprehensive” in its name. Is it really comprehensive? Why is it named like that? First, it can be applied for every vehicle registered in Road Transportation Authority. Second, it also covers the passengers inside the insured vehicle when an accident happens. Third, there is a limited amount of claim for the other vehicle(s) when an accident is happened with the insured vehicle. Fourth, moreover, there are “Additional Covers” which include Windscreen, SRCC (Strike, Riot and Civil Commotion), Acts of God (Flood, Windstorm, and Earthquake), War Risks, and Theft. Besides, vehicles are must-have things for businesses today so that this insurance is essential for a business organization. 

Insurance for Cash Holders

There is an insurance called “Cash in Safe” which is developed for businesses. “For every business, it is important to safeguard their assets from unforeseen risk as it can disrupt the daily business operation and may incur losses. Thus, Cash in Safe insurance can help the businesses to protect against loss of money which is kept in the safe at own premises,” according to Ami-insurance.com. It also covers the loss of cash due to theft or robbery. So, it could be more suitable for banks. The next one has the similar name, “Cash in Transit Insurance,” but different in functions. It is important for every business to secure its cash during a transit as there are many uncertainties to disrupt the daily operation and may incur losses. Therefore, this can cover any loss of cash due to theft or robbery during a transit.  

Players and Providers

Some of the main insurance players and providers in 2019 include AYA Myanmar Insurance (AMI), AYK Insurance Service, Capital Life Insurance, FNI Insurance, GGI Insurance, Global World Insurance, IKBZ Insurance, Myanma Insurance and Myanmar Insurance Association. Since the government has liberalized insurance market, there may be new international players who may come to Myanmar and compete with local organizations. This could be good news for the individuals and businesses as the market may bring better products at more affordable premiums.