Insurance market highlights in 2014
Insurance market highlights in 2014
2014 is being seen as a successful year for the insurance sector though the domestic economy continued to face many difficulties. Following are the top ten insurance events of the year as voted by the Association of Vietnamese Insurers.
1 First dialogue between Ministry of Finance and insurance companies: In late February the Ministry of Finance held its first dialogue with life and non-life insurance companies and brokerages operating in Viet Nam and the Association of Vietnamese Insurers to seek their opinions on how to grow the market. Relevant ministry units were instructed to study the proposals and address related difficulties.
2 Authorities focus on facilitating insurance operation: The Government has issued Decree 91 addressing problems related to taxes imposed on life insurance agents and employers who buy life insurance for employees. Meanwhile, the MoF issued circulars guiding accounting by life insurance companies and also co-ordinated with the State Bank of Viet Nam to issue a circular on distributing life insurance products through banks. Adjustments are underway to simplify several administrative procedures related to insurance.
3 Ministry of Finance unveils aquaculture insurance under Decree 67/ND-CP. Four companies, Bao Viet, Bao Minh, Petrolimex Joint Stock Insurance Company, and PetroVietnam Insurance Co. were selected as insurance providers for the programme and VINARE as the re-insurer.
4 Insurance for export credits on experimental basis: An experimental programme began in 2013 for insurance for export credits, resulting in 46 contracts worth more than US$600 million being insured. An aggregate premium of VND17 billion was collected, of which VND13 billion went towards claim settlement in 2013 (not including those incurred in 2014).
5 Insurance continues to grow at double-digit rate: This year the non-life insurance sector is expected to post growth of around 10 per cent to reach VND26.6 trillion ($1.254 billion) in premiums while life insurance premiums grew by almost 22 per cent to VND28.3 trillion. Premiums collected through brokerages is likely to rise by 13 per cent. Insurance companies invested around VND130 trillion, up 17 per cent, including in government bonds.
6 New players enter the market: BIDV MetLife, a $48 million life insurance joint venture between the Bank for Investment and Development of Viet Nam and an American partner, was licensed by the MoF. The ministry also issued a licence to Korean firm Seoul Guarantee Insurance Company for a branch in Viet Nam.
7 Non-life insurance companies create framework for motor vehicle insurance: After years of losses on motor vehicle insurance, non-life insurance companies tweaked policies and premium levels to submit to the MOF for approval.
8 Insurers actively handle losses caused by incidents in Ha Tinh, Binh Duong, and Dong Nai provinces: 27 non-life insurance companies out of the 29 in the market have agreed to settle the claims made by foreign companies for losses sustained during the riots in May in the provinces of Ha Tinh, Binh Duong, and Dong Nai. The total losses were estimated at VND2.5 trillion. They paid VND268 billion in compensation in 2014. More payouts will be made next year.
9 Workshops on mandatory explosion/fire insurance: Fire departments and the MoF's Insurance Supervision Department held workshops in Ha Noi and HCM City to discuss regulations that make it mandatory for companies to buy explosion and fire insurance and facilitate discussions between insurance companies and fire departments.
10 Fifteenth anniversary of AVI: The association celebrated its 15th year of operations in late December. It will organise its fourth congress early next year. The association has been working towards a healthy competitive environment to ensure market growth, helping draft insurance regulations by the Government, and acting as a bridge between members and functional institutions. It also works to improve public awareness of insurance.
