Investors make transactions at Bao Viet Life’s Nam Dinh branch. (Source: VNA) Hanoi (VNS/VNA) - Vietnam’sinsurance industry achieved high year-on-year growth of 24.35 percent in thefirst half of 2018, helping total revenue to reach more than 58.65 trillion VND(2.58 billion USD).
Deputy General Director of theMinistry of Finance’s Insurance Supervisory Authority (ISA) Doan Thanh Tuansaid besides maintaining a high growth rate, the financial status of insurancefirms also improved in the first six months. Their total assets rose anestimated 27.33 percent on-year to almost 337 trillion VND (14.9 billion USD).
During the period, insurancecompanies re-invested 277.38 trillion VND (12.2 billion USD) into the economy,marking an on-year rise of 27.47 percent, Tuan said, adding that insurers alsopaid out 16.32 trillion VND (719 million USD) to customers, up 22.43 percentcompared with the same period last year.
He said that ISA would step upits efforts to restructure the insurance market in the remaining months of theyear, aiming at transparency, safety and efficiency.
Thisyear, the insurance sector has targeted revenue of 129.24 trillion VND (5.7billion USD), up 22.38 percent against last year. If it hits the target, itwould be the fifth consecutive year the insurance industry has posted annualgrowth of more than 20 percent. The industry’s total revenue surged by 21.2 percentto 105.61 trillion VND in 2017 (4.6 billion USD).
Phung Ngoc Khanh, the ISA’sgeneral director, said that Vietnam’s insurance market had high potential asthe number of customers remained low while incomes and awareness were rising.
The insurance industry is alsoexpected to benefit from the country’s projected GDP growth of more than 6 percentannually over the next three years.
It also has great potential asthe country has one of the world’s lowest life insurance penetration levels atless than 1 percent of the GDP. The average insurance premiums in Vietnam standat 30 USD, much lower than the global average of 595 USD and Southeast Asia’s 74USD.
Many insurers, such as Generaliand Prudential, have recently decided to increase their charter capital andexpand their business operations as they forecast the market will grow.
The Vietnam Insurance Associationreported there were 18 life and 30 non-life insurers in the Vietnamesemarket. Among the 18 life insurers, only Bao Viet Life Insurance isVietnamese owned, while the remainder were joint ventures or whollyforeign-owned companies.
According to experts, theparticipation of foreign investors in Vietnam’s insurance market would developthe market while enriching domestic insurers with experience and governance.
In addition, modern distributionmodels in the local insurance industry had been gradually developing thanks tothe participation of foreign investors.
“The participation of foreigninvestors has helped domestic insurers increase their competitive edge throughthe enhancement of training and diversification of products,” Bao VietSecurities Company noted in a report.-VNS/VNA
VNA
