MGA Insurance Brokers is to open its first overseas office in Cambodia, becoming only the second foreign broker in the capital Phnom Penh.

Chairman John George says the office will provide a launching pad to southeast Asia, where there are significant growth opportunities in Cambodia, Laos and Myanmar.

“Cambodia has a number of special economic zones where international businesses are setting up to take advantage of the relatively low cost base,” he told insuranceNEWS.com.au. “Domestically, a lot of new businesses are also being established.”

Mr George has a 13-year association with the country through work with a charity there and as Chairman of the Australian Cambodia Foundation. 

Cambodia has gross premium of about $US40 million ($42 million), but this has doubled in the past four years and will continue to grow as the banks financing economic expansion demand businesses have cover, he says.

Mr George also expects third-party motor cover to become compulsory in the next year or so.

MGA is seeking regulatory approval to open the branch on January 1 with five staff and back-office work carried out at its Adelaide headquarters.

It will establish a joint venture with two local brokers, Chantol Seng and Sophat Meas, both of whom worked for a local insurer before setting up their broking business.

Cambodia’s domestic insurers generally arrange facultative reinsurance with foreign insurers.

MGA had considered expanding into Asia from Hong Kong, Singapore or Malaysia, but Mr George told insuranceNEWS.com.au he sees a greater advantage growing with an emerging economy.

Although Cambodia does not fare well in corruption surveys, he says his long association with the country means he understands “how the system works and what to steer clear of”.

MGA is already drawing up plans to expand to other major Cambodian cities such as Siem Reap, Sihanoukville and Battambang.