Govt to establish insurance association
Govt to establish insurance association
The Ministry of Finance expects to finalise the establishment of an insurance association within the next five months after it has been preparing for this for many years.
“We plan to launch the association in June this year,” said the head of the Insurance Supervision Unit, State Owned Enterprise Finance Management Department of the ministry, Mr Phonevilay Thapvilay.
“We will ask all insurance companies to join a third meeting on the issue and to present the regulations of the association by the end of this month,” Mr Phonevilay said yesterday.
“We are sure the association will be established because the insurance companies also agree with the idea.”
Once the association is set up, it will be good for both operators and customers because the operators will have to follow the fee and price schedule for insurance services and products as set by the Ministry of Finance.
“They will have fair competition under the regulations,” he said.
Another benefit is that insurance operators will able to participate in both regional and international insurance opportunities.
“In Asean countries, insurance companies that have the same or similar services and products will be able to integrate as one group,” Mr Phonevilay said.
Allianz General Laos (AGL) Deputy Managing Director, Mr Holady Volarath, said that once the association is established, it will be easy for the government to handle the management and administration.
“Once we integrate as an association, we will be able to become a member of the Asean Insurance Council (AIC),” Mr Holady said.
“Then we will be able to present what we want to do. Currently we are just an observer when we are at meetings of the AIC.”
AIC has funds to support training courses for members, for meetings and discussions on business cooperation, new service products presentation and the exchange of information and experience.
“Currently all Asean members have an insurance association, except Laos and Myanmar,” Mr Holady said.
AIC is an organisation under Asean which is focusing primarily on the insurance industry and its related fields, according to its website.
The organisation's objectives are to promote and stimulate the development of the insurance industry within Asean and to build relationships among insurance companies in Asean.
The inauguration of the AIC's permanent secretariat is part of the organisation's strategic initiative to enhance its role and contribution to the development of the insurance industry before the implementation of the Asean Economic Community this year.
Nine years ago, AGL was the only insurance provider in Laos. There have now been an increasing number of insurance companies and therefore more competition.
The increase in insurance companies means that the sector is able to grow and create more investment opportunities.
The more companies there are in Laos creates more competition in market share, services and pricing.
The Lao insurance business began in 1990 and, until 2007, only AGL had taken part in it.
Since 2007, there have been 14 domestic and international companies from Thailand, Malaysia, Vietnam, China, France and Japan investing in the sector.
Another company from China is currently interested in beginning operations in Laos.
Mr Phonevilay said there were a further three foreign companies proposing to the Ministry of Finance recently, hoping to be new insurance operators in Laos. Two are from Thailand and the other is from the Philippines.
Currently, insurance companies in Laos provide a range of products, including motor, home and health insurance to individuals and businesses with the hope of securing risks and contributing to social development.
Business insurance also provides small to large risk cover for local and foreign investors, organisations and infrastructure development projects.
