The world's top insurance firms are setting their sights on Myanmar, steeling themselves for a fight with corruption and ghosts from the nation's political past.
Prudential Plc, AIA Group Ltd and Manulife Financial Corp are among the global insurance giants preparing to enter Myanmar as the government rolls out a framework for the sector's development with the lifting of European and U.S. sanctions.
The opportunities are many. A large population, economic reforms and a natural resources industry could combine to create rising wealth among Myanmar's people. There is also money to be made by general insurers providing cover for the impending boom in construction projects.
A few years ago everybody needed to have a China story and India as well, said Michael Daly, a director and consulting actuary for the China and Southeast Asia life insurance practice at Milliman Inc. Now the attention has shifted to Southeast Asia.
Myanmar could produce $1.6 billion in annual premium revenues, according to Reuters calculations based on economic data and comparisons with neighbouring markets. That would less than 10 percent of what Singapore premiums bring in now, but in line with Vietnam's current insurance market.
With the opportunities come obstacles, including new rules governing foreign insurers that are yet to be tested.
In addition, the country's one sole established insurer - state-backed Myanma Insurance - is guaranteed certain contracts, effectively closing off portions of the market.
Other challenges include competition from a handful of regional players and corruption.
The country's political history may also pose problems for insurers looking to sell products to high net worth individuals who may have ties to the former junta or be on blacklists.
And yet the early enthusiasm among global insurers shows how tough things have become in their home markets and how crucial they see their position in Southeast Asia's growth story.
Global insurers have had their eyes on Southeast Asia, buying up assets and opening offices in Indonesia, Cambodia, Sri Lanka, Malaysia and Thailand as growth rates in the developing world far-outpaced developed markets.
Premiums in Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam are expected to rise an average of 7.9 percent next year, according to a report by Swiss Re, more than double the global life insurance average.
Myanmar is attractive to insurance executives as its population of nearly 60 million makes it one of the largest in the region. Per capita gross domestic product is also over $850, near the $1,000 mark that insurers