The National Assembly on June 16 passed the amended Law on Insurance Business,with 94.2% of delegates voting in favour. The revised law will enter intoeffect on January 1, next year.
The Law stipulates the organisation and operation of insurance companies, therights and obligations of organisations and individuals participating ininsurance, and State management of insurance business activities.
According to the Ministry of Finance (MoF), the country currently has 77insurance companies, including 31 non-life insurance companies, 19 lifeinsurance companies, two reinsurance companies, 24 insurance brokeragecompanies and a branch of a foreign non-life insurance company.
Data from the Vietnam Insurance Association showed by the end of May 2022, thetotal insurance premium revenue of the whole insurance market reached nearly 94.28trillion VND, up 16% over the same period last year. Of which, the revenue ofthe non-life insurance market was at 27.56 trillion VND, up 13.1% over the sameperiod the previous year, and the revenue of the life insurance market was at 66.72trillion VND, up 17.2%.
Analysts say Vietnam's insurance market still has a lot of room fordevelopment, thanks to the support from the stable macro-economy.
SSI Research forecast revenues from insurance premiums could rise by 18% to 256trillion VND this year, driven by the recovery in demand and growing onlineinsurance and collaboration with insurtech firms.
Ngo Viet Trung, Director of the MoF’s Insurance Management and SupervisionDepartment, said Vietnam's population was in the golden age, which creates anopportunity to develop many life insurance products such as mixed insurance andretirement insurance.
Besides, non-life insurance products had many opportunities to develop thanksto economic growth and rising investment, construction and trade.
However, experts say besides the new policy, the insurance market needstransparency to overcome unfair competition and fraud for sustaineddevelopment.
According to Trung, Vietnam is facing many challenges in developing itsinsurance market despite the positive prospects. Besides the unprofessionaldistribution channel of insurance agents, the insurance market still seesunfair competition, lack of cooperation and mutual support in sharinginformation among insurers to fight against fraud, which causes decreasingcompetitiveness in the whole insurance market.
Nguyen Thanh Nga, director of the Vietnam Insurance Development Institute,attributed the shortcomings to the lack of a database for the entire insurancemarket.
Currently, the Vietnam Insurance Association had built a database for vehicleinsurance, but insurance companies had not voluntarily shared theirinformation, which causes statistics to be incomplete and inaccurate, Nga said,adding that the insurance agency management software system also had only theagent data of life insurance companies.
Besides, insurance companies are currently using different informationtechnology systems, so there is no common data connection, which causesinsurance fraud to develop, according to Nga.
The industry needed to urgently build database infrastructure, she said./.
VNA