In the face of economic crisis, the life insurance sector still reaped benefits from foreign insurer contributions last year and is expected to continue its development in 2012.

Lam Hai Tuan, director general of ACE Life Vietnam, said that the while the financial market will face many new impediments this year, correct exploitation and management could still see insurers grow.

The Vietnamese life insurance market looks promising due to only 5 percent of the total population being dependent on it alongside strong economic growth and increasing demand.

According to the Association of Vietnamese Insurers, despite high inflation and interest rates, coupled with economic difficulties last year, the life insurance sector still reached a total premium value of 16 trillion VND (762 million USD), a year-on-year increase of 17 percent.

Phung Dac Loc, the association secretary general, explained the sector's solid growth rate: "When the idle money of residents is made redundant and investment channels in the securities and property markets are unattractive, saving for the future generated conditions for life insurance market development."

Spotting the potential, Italy's General Life Insurance and Vietinbank Aviva Life Insurance, a joint venture between Vietinbank and the UK's Aviva Group, tapped into the market last year.

There are currently 14 life insurance firms in Vietnam and, except for Bao Viet Insurance, the only local company, the remainder is dominated by foreign-invested enterprises, assuring a balanced non-life insurance sector with foreign businesses accounting for about 41 percent.

Experts said that foreign insurers have made a great contribution to the development of the general and life insurance markets.

"Looking back one decade, life insurance companies have mobilised great capital resources from residents to reinvest into the economy," said Huynh Thanh Phong, executive director of the AIA Group in the region and chairman of the management board of AIA Vietnam.

The development of the financial market depends on three pillars: banking, insurance and securities. International insurers play a significant role in the development of the Vietnamese insurance market, he said.

International life insurance firms reaped good results last year. For instance, Prudential Vietnam got 1.8 million new deals with a total premium of 1.45 trillion VND (69 million USD).

AIA Vietnam signed 592,000 insurance policies with a combined premium of 426 billion VND (20.3 million USD).

ACE Life Vietnam inked more than 149,000 deals with a total premium of 67.3 billion VND (3.03 million USD).

Dai-Ichi Life Vietnam signed more than 487,000 policies with a combined premium of 460 billion VND(21.9 million USD)./.