Strong year for insurance industry
Strong year for insurance industry
Viet Nam’s insurance industry achieved high year-on-year growth of 24 per cent in 2018, the fifth consecutive year the industry posted annual growth of more than 20 per cent.
According to the Insurance Association of Vietnam (IAV), total revenue of the country’s insurance companies this year is expected to reach VND133 trillion (US$5.68 billion), higher than the industry’s annual target of VND129.24 trillion set early this year. Of the total, life insurers contributed VND87 trillion in revenue, up 33.8 per cent year-on-year, while non-life insurers made up VND45 trillion, up 12 per cent.
The financial status of local insurers has also continued to improve this year, with total assets surging by 21 per cent year-on-year to VND384 trillion, VND302 trillion of which came from life insurers.
Insurance companies re-invested VND319 trillion into the economy, marking a one-year rise of 29 per cent, in addition to paying out VND36 trillion to customers.
“Viet Nam’s insurance market continues to record impressive growth momentum. Local insurers have overcome difficulties, seized the opportunity, continued to restructure and enhanced their competitiveness to successfully complete their business plans for 2018,” IAV chairman Tran Vinh Duc said.
Experts have also kept upbeat about the industry’s health in the coming years, forecasting that it would maintain a growth rate of 10-20 per cent yearly. Many banks that co-operate with insurers even expected an annual growth rate of up to 30-40 per cent.
The fast-growing domestic insurance market should thrive thanks to rising living standards and high gross domestic product (GDP) growth of more than 6 per cent annually over the next three years, the experts said.
It also has great growth potential as the country has one of the world’s lowest life insurance penetration levels at less than 1 per cent of the GDP. The average insurance premium in Viet Nam stands at $30, much lower than the global average of $595 and Southeast Asia’s average of $74.
To maintain high growth, deputy finance minister Huynh Quang Hai said that IAV, in conjunction with other relevant agencies, must raise awareness about insurance.
IAV also needs to promote closer co-operation among insurers so that businesses can join hands to build and fine-tune the industry’s databases, which will improve the quality of their services, thereby raising their financial capability and competitiveness, Hai said.
Hai also told insurers to work with IAV and the Ministry of Finance to develop a new insurance business law to contribute to the development of the local insurance market.
The Ministry of Finance’s Insurance Supervisory Authority (ISA) reported that the country currently has 64 insurance companies, including 30 non-life insurers, 18 life insurers, two reinsurance companies and 14 insurance brokerage companies.
There are up to 850 non-life insurance products and 450 life insurance products sold on the Vietnamese market.
