The legal framework for the operation of insurance brokerage companies will be improved to enhance their competitiveness, according to the Insurance Supervisory Authority under the Ministry of Finance.

The department's director Phung Ngoc Khanh said at a conference on June 17 that insurance brokerage was becoming an important factor for the development of the insurance market as well as the country's socio-economic development.

At the conference, brokerage firms spoke about the difficulties they face and proposed various improvement measures to the insurance watchdog.

Firms said that detailed regulations for operations and insurance brokerage fees are needed.

They pointed out that in Vietnam, there are currently no regulations allowing firms to charge fees for providing consultancies to customers and this has limited the operations of insurance brokerage firms.

According to the statistics of the Ministry of Finance, total insurance premiums through the brokerage channel increased rapidly by 22 percent last year.

During the 2011-14 period, total insurance premiums through brokerage reached 21.165 trillion VND (979.8 million USD), or equivalent to 22.7 percent of the total non-life insurance premiums during the period, and contributed nearly 300 billion VND (13.88 million USD) to the State budget.

Commissions from insurance brokerage last year reached 492 billion VND (22.7 million USD), rising by around 10 percent.

A representative of the department said that studies on the development of insurance brokerage in foreign countries are being carried out to seek measures that can be applicable to boost the development of this sector in Vietnam.

Currently, there are major gaps between foreign insurance brokerage firms and domestic firms in management capacity and market shares. Last year, five foreign brokers dominated the market, holding a combined share of more than 92 percent.

In addition, insurance premiums collected through brokerage remained modest, just 12 percent of the total premium of the insurance market, while the percentage of Thailand and the US were 30 percent and 85 percent, respectively.

The department revealed that a regulation to allow insurance brokerage firms to offer consultancy services will be taken up for consideration in line with international practices.

Meanwhile, firms have urged the foundation of an association of insurance brokers to enhance their operation capacity and standards.-VNA