20% Insurance Growth Target Set for Vietnam

Viet Nam’s insurance sector is predicted by experts to grow 20 per cent this year thanks to changes in Government policies.

According to Mr. Phung Ngoc Khanh, Head of the Insurance Supervisory Authority Department, the Ministry of Finance this year will carry out some solutions to improve the market including amendments to the Insurance Business Law No24/2000/QH10 and Law No61/2010/QH12, implementation of policies on agriculture, aquaculture and pension insurance in order to launch new insurance products for the market.

Mr. Phung also affirmed that the MOF will supervise and support insurance companies during their operation. The Ministry will continuously make all efforts to implement effectively international commitments and co-operation. Mr. Phung expected that the insurance industry will attract more prestigious investors and the market will keep the growth of over 20 per cent in 2017.

Mr. Pham Kim Bang, Chairman of the Insurance Association of Viet Nam, predicted that growth rate for life insurance and non-life will increased by 25% and 14% respectively. He remarks that the perception of Vietnamese on the role of insurance has changed and effect to their habit in purchase for insurance.

Furthermore, Vietnamese economic growth is predicted to continuously increased, and it will be an advantage for the development of insurance market. In addition, new Government policies on public property and Nat CAT insurance will positively boost the market to grow.

By the end of 2016, there are 62 insurance companies operating in Vietnam including 29 non-life insurers, 18 life insurers, 2 reinsurers, 13 brokers and one branch of a foreign insurance company.

The Insurance industry enjoys a quite good result in 2016. According to report from the Insurance Supervisory Authority Department, the total revenue stood at nearly VND102 trillion (US$4.45 billion). This result is contributed by VND86 trillion from underwriting and VND15 trillion from investment. Total claims were estimated at VND25.9 trillion with VND12.6 trillion from non-life insurance and VND13.3 trillion from life insurance.

Despite good results, there are some constraints including limitation in insurance products, weakness in the enterprise risk management and unfair competition in non-life insurance.