How can Insurance pay heavy claims?
Many wonder how Insurance plans in Cambodia are protecting consumers in case of heavy claims, such as a tragic event where the cover guaranteed may reach several hundred thousands of dollars (Hospitalization with a heavy surgery, Accident in Europe with emergency admission, Death benefits….etc..).
This is actually possible because Insurance experts are managing such risks through calculations when designing the product/ premiums fees. They are using mathematical models to make sure the Insurance company will be able to support any situations.
Reinsurance support Insurance companies
Moreover, this industry is structured with another player called: Reinsurance. It is a very large and quite complex business managed by people with a very deep quantitative background.
In short, the Insurance company pays a ‘premium’ to a Reinsurance company to support them financially in case necessary.
Therefore, a short definition is that reinsurance is insurance for insurance companies.
An entire Insurance ecosystem to protect financially Cambodians
The ecosystem including the Insurance Regulator of Cambodia, the Insurance company and Reinsurance companies allow the insured consumers to be protected financially.