Fire Insurance Costs Soar for Garment Sector

Large payouts last year by local insurance companies to two garment factory owners and regional natural catastrophes have resulted in a huge hike in the cost of fire insurance for commercial premises in Cambodia, brokers said. Cambodia’s insurance industry paid out some $24 million in fire claims last year out of a total $29.7 million in total revenues earned, said Ty Atith, assistant to the chairman of the General Insurance Association of Cambodia. The lion’s share of the payouts went to the owners of June Textile Factory in Phnom Penh and River Rich Textile Factory in Kandal province, both of which were destroyed by accidental fires, Mr. Atith said. As a result, local insurers are saying that commercial premises’ fire insurance coverage, particularly for garment factories, has increased by 25 to 100 percent—depending on the insurance firm—company representatives said last week. “The rate increase is only mostly for garment factories, but not for [other types] of insurance,” said Mr. Atith. “This is because of the claims that incurred so much loss last year,” he said, adding that rates would still vary between the seven insurance companies offering coverage in Cambodia. …