Vietnam property insurance market 2013 review

According to statistics of Vietnam Insurance Association, as at 3rd Quarter 2013 ending, total written premium of property business was VND 710 billion and estimated to be about VND 947 billion for the whole year 2013.

According to statistics of the Ministry of Public Security, there were 2,600 fire and explosion incidents in 2013, an increase of nearly 10% compared to 2012. Total economic loss due to fire in 2013 was approximately VND 1,520 billion.

Loss amount of 5 largest losses due to fire in 2013 (details in table below)were estimated at VND 1,206 billion contributing 79% of total damage caused by fire.

5 large losses due to fire in 2013:

Unit: VND billion

No.Name of lossBusinessSource of capitalDate of loss100% loss amount
1MEIKO ELECTRONICSElectronicsFDI02/09/2013720
2Pou YuenLeather shoesFDI21/08/2013260
3Alexander TheodoreWoodFDI09/01/2013150
4Ha PhongTextileLocal investors06/04/201346
5Phuong NamPackingLocal investors20/04/201330

In 2014, Vietnam insurance companies may face some issues as follows:

– Settle claims for the losses occurred in 2013.

– Insurance companies may have to increase premium rate and deductible in property insurance policies.

– It is obvious that premium from FDI enterprises greatly contribute to total premium income of Vietnam property insurance but most of huge losses occurred to the property of FDI enterprises. At the beginning of 2014, another fire loss occurred in Mobase Vietnam factory which is a FDI company with loss amount approximately VND 420 billion. It is necessary for insurance & reinsurance companies to be careful in writing this group of risks.