Cambodia’s insurance regulator is sharpening its focus on compulsory lines and market education as the country’s insurance sector reports higher premiums but remains lightly penetrated compared with other Asian markets.

Regulator links compulsory cover to social protection

At a dissemination seminar on compulsory insurance held at the Phnom Penh Hotel, the Insurance Regulator of Cambodia (IRC) described mandatory cover as an important component of the country’s social protection and economic policy through 2030. IRC Director General Bou Chanphirou told officials and industry representatives that insurance continues to support Cambodia’s economic performance, including estimated gross domestic product growth of about 6% in 2024. He presented compulsory lines as a way to strengthen financial buffers for households and businesses.

Cambodia’s Insurance Law currently prescribes three main categories of mandatory insurance. The first is motor third-party liability insurance for business vehicles. The second is passenger liability insurance for transport operators by land, water, air, and rail. The third is construction site liability insurance intended to compensate victims for bodily injury or property damage arising from project activity. Bou said implementation of these requirements remains uneven. Compliance gaps are linked to low awareness among business owners, limited public dissemination, and a lack of detailed understanding among some enforcement authorities, he said. “To strengthen law enforcement, the Insurance Regulator of Cambodia has set the enhancement of compulsory insurance implementation as a priority under the Development Plan for the Insurance Sector 2021-2030,” Bou said, as reported by Khmer Times.

The seminar was attended by Phnom Penh Deputy Governor Tema Vichekal, an inter-ministerial working group, representatives from ministries and state institutions, law enforcement agencies, private sector delegates, and trainees. The regulator said the session aimed to clarify legal obligations and explain how insurance can help protect citizens, families, and enterprises from financial shocks. IRC said it will continue to work with relevant ministries and state bodies to reinforce enforcement so that compulsory schemes more directly support Cambodia’s social safety net and long-term development objectives.

Market trends in general and life business

The enforcement drive is taking place as the market continues to expand. IRC data for the fourth quarter of 2025 (Q4 2025) show that Cambodia’s insurance sector generated $85.8 million in gross written premiums, up 15% from $74.3 million in the same period of 2024. The market includes 35 licensed operators:

17 general insurers
12 life insurers
eight micro-insurers
two reinsurers

There are also 16 licensed insurance brokers and four loss adjusters. General insurance posted the largest year-on-year gain in the quarter, with premiums rising 42% to $35.2 million from $24.8 million. Key lines include motor, property, fire, and liability, which have grown in line with corporate investment and infrastructure activity. Life insurance remained the largest contributor to premium volume, accounting for $50.55 million in Q4 2025, a 2% increase from the prior-year quarter. After a period of rapid expansion, life premium growth has slowed, but demand for long-term savings and protection products continues to shape the market’s profile. Claims paid by insurers reached $13.2 million in the quarter, 17% higher than the $11.3 million recorded a year earlier. The increase is consistent with higher policy uptake and greater use of claims procedures. “Despite facing many challenges, the insurance sector continued to see good performance,” Bou said at the Phnom Penh seminar, as reported by Khmer Times.

Low penetration and implications for ASEAN insurers

Despite the growth in premiums and market participants, Cambodia’s insurance penetration remains low compared with regional peers. IRC figures put penetration at roughly 1.17% of gross domestic product, with insurance density – average annual spending on insurance per person – at about $22. These metrics indicate a market still in an early development phase. Limited public familiarity with insurance, income constraints and the prevalence of cash-based transactions have weighed on adoption. Distribution approaches and product structures are continuing to evolve as insurers test models suited to local conditions. Regulators have identified compulsory insurance as one mechanism for increasing risk pooling and public familiarity with insurance. Alongside enforcement, the IRC has expanded public education activities and advanced regulatory measures aimed at market oversight and consumer protection.

The Phnom Penh seminar on compulsory insurance forms part of this broader program, with officials presenting mandatory schemes as a way to strengthen financial protection for road users, passengers. and workers on construction sites. Firmer implementation of compulsory cover would likely increase liability business volumes and could draw further attention to claims handling and service levels. “IRC is actively promoting the advantages of insurance among the public and building trust and confidence,” the regulator said, noting that it is working with a range of stakeholders to expand awareness and improve compliance with existing legal requirements. Cambodia’s experience may be of interest to ASEAN markets that are reviewing their own social protection and disaster-risk financing arrangements, as it shows how regulatory focus on compulsory lines, combined with market-development measures, may contribute to higher insurance penetration and stronger risk management in a smaller Asian market.