The insurance market in Myanmar is beginning to open the door to competition, following recent democratic advances – but its high capital requirements are expected to deter insurers.

State-owned Myanma Insurance has begun selling applications to allow private companies to offer products for the first time.

Approved private companies will be allowed to sell six types of insurance, while Myanma Insurance will continue to provide insurance for government projects and the oil and gas industry.

Myanma Insurance President U Aye Min Thein says companies interested in selling life insurance must have at least 6 trillion kyat ($7.3 billion) in state-run banks, while those offering general insurance must have at least 40 trillion kyat ($48.5 billion).

Mr Thein defended the high capital requirements, saying: “We don’t want to see a situation where insurance companies disappear within a short time because they have taken on more risk than they can manage.

“We only want businesses that have very strong financial positions to take part in this industry.”

Myanma Insurance will set minimum premiums and maximum commissions.

Application forms for licences must be lodged by June 29, with the successful companies to be notified in August.

IAG, which has identified Asia as its platform for growth, says the news has not altered its plans to operate in China, India, Thailand, Malaysia, Vietnam and Indonesia.

“We’ve identified our target Asian markets and they remain unchanged,” a spokesman told insuranceNEWS.com.au.