Insurance industry grows 20 percent

Vietnam ’s insurance industry saw growth of 20 percent last year, despite tough economic conditions, said a recent report.
Vietnam’s insurance industry saw growth of 20 percent last year, despite tough economic conditions, said a recent report.

According to the Ministry of Finance, the overall market earned more than 25.5 trillion VND (1.3 billion USD) in revenue in 2009 and reinvested nearly 67 trillion VND (3.5 billion USD) in the economy, an increase of more than 17 percent against 2008.

Total compensation last year reached 9.7 trillion VND (510.5 million USD), a 3.4 percent year-on-year increase.

In the non-life insurance and reinsurance sectors, 25 out of 27 insurance companies registered revenue growth. Bao Viet Holdings’ revenue rose by 101 percent to 3.6 trillion VND (193.8 million USD), while PetroVietnam Insurance (PVI)’s earnings rose 37 percent to 2.7 trillion VND (145.8 million USD) and Bao Minh’s earnings rose by 3.28 percent to 1.8 trillion VND (96 million USD).

Smaller and newly established insurance firms also saw revenue gains. Vietnam National Aviation Insurance’s earnings rose 300 percent, Liberty Insurance Vietnam’s earnings rose 283 percent, Agriculture Bank Insurance’s earnings rose 102 percent and AAA Assurance’s earnings rose 64.4 percent.

In the life insurance sector, the number of new contracts last year grew 22.4 percent to 679,710. Revenue collected from new contracts reached 3 trillion VND (158 million USD), a year-on-year increase of 38.4 percent. Leading firms such as Prudential, Bao Viet, Manulife, Dai-ichi, AIA and ACE Life earned more than 80 percent of the total life insurance market revenue.

Vietnam ’s insurance industry in 2009 made up just 2 percent of the nation’s gross domestic product (GDP). Industry experts said that figure should grow rapidly in 2010 as economic development accelerates and per capita income rose.

Jack Howell, Prudential Vietnam’s CEO, said strong growth in the local insurance market has proved that Vietnam has great development potential.
Phung Dac Loc, general secretary of the Vietnam Insurance Association, said the local insurance market is attractive and still under-exploited, particularly in sectors such as agriculture and housing.
This year, when the economy is expected to rebound strongly, many insurance companies have set high revenue targets. BIDV Insurance Co is targeting a 35-percent revenue increase, while Bao Viet Life Insurance is aiming for 9 percent growth.

Due to increasing competition, many insurance companies have said they would increase investment this year in product quality, technology and customer services./.

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