Insurance market seeks to thrive
Insurance market seeks to thrive
Insurance is an important sector to any country and it has proved itself a potential industry in Viet Nam in the time to come.
Ensuring financial safety for production and trade is a regular requirement to insurance businesses.
The important intermediary financial market has been officially run since 1993 when the Government issued Decree 100 on establishing and organizing insurance businesses in Viet Nam.With the participation of groups and multinational corporations, the market has recently seen all forms of business ownership, which are regulated by a modern legal system and a specific strategy.
According to the Ministry of Finance, the market with a 20%/year average growth is attractive to foreign insurance companies. The premium turnover reached VND40,968 billion ($1.9 billion) in 2012 and VND20,922 billion ($938 million) in the first half of 2013.
The local insurance businesses have grown by learning international-standard management approaches and experience of international companies and accepting fair competition. Though facing the pressure of making profits and limitations on advertising costs, State-owned companies have competed successfully with international insurance businesses.
The insurance market has worked as an important medium-term investment channel for the national economy. In the first half of 2013, insurance businesses re-invested approximately VND100 trillion ($4.7 billion) in the economy, doubling the figure in 2008. Through diversified and effective investments in socio-economic development projects, they have provided a shield for the national economy.
The global economic downturn in the past is still challenging the health of the insurance market.
Therefore, to realize its set targets for the 2011-2015 period, there is a need for it to improve the legal system, enhance the safe performance, management and competitiveness of players, as well as promote international cooperation and integration.
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