Vietnamplus

As Vietnam continues to open up its insurance market further, allowing foreign non-life insurance companies to set up branches in the country, domestic firms will have to improve their act to cope with stronger competition, industry insiders say.

Phung Gia Loc, General Secretary of the Association of Vietnamese Insurers (AVI), said domestic non-life insurance companies will have to face more rivals with greater advantages this year.

Vietnam’s insurance market is expected to continue its 2011 growth rate, with an estimated 19-21 percent year-on-year increase in 2012, according to an industry official.

Vietnamese Minister of Finance Vuong Dinh Hue has pledged to create all favourable conditions for Japanese businesses to operate effectively in Vietnam .

Despite economic difficulties, the insurance market still surged 20.34 percent in the first half of the year against the same period in 2010, said the Ministry of Finance's Insurance Supervisory Authority.

"Research and Markets" has said that Vietnam insurance market is one of the fastest growing insurance markets in the world and Vietnam insurance sector offers ample opportunities for international insurers.

Insurance companies saw high profits last year, with insurance premiums totalling 30.8 trillion VND (1.5 billion USD) in 2010 – far surpassing 2009's total of 25.5 trillion VND (1.2 billion USD), said the president of the Association of Vietnamese Insurers, Trinh Quang Tuyen.

Total insurance premiums are estimated to have reached 30.69 trillion VND (1.57 billion USD) this year, a rise of 20.3 percent on last year, according to the Ministry of Finance's Insurance Management and Supervision Department.

The insurance market grew by more than 25 percent in the first nine months, according to the Association of Vietnamese Insurers.

While the country is waiting for Government approval of a pilot agricultural insurance project, a model of livestock insurance fund in Son La province’s Moc Chau Dairy Cow Breeding JSC (MCDCB) has been successful, helping minimise risks for farmers.

The domestic life insurance market has been sparked into life by a story that received wide media coverage about a businesswoman whoa paid an annual premium of 1.2 billion VND (61,000 USD).

Enhancing safety during offshore oil and gas exploration and production was the main topic of a seminar, hosted by the Vietnam National Oil and Gas Group (PetroVietnam) in Ho Chi Minh City on Sept. 30.

The Japanese economic daily, Nikkei on August 11 carried an analysis saying that Vietnam's nonlife insurance market is attracting more and more corporate and individual customers, and the intensifying competition may spur a realignment among insurers.

The International Insurance News forecast for further growth in the Vietnamese insurance market with a number of established insurance companies entering the market.

The Ministry of Industry and Trade's Competition Council has fined 19 insurance companies for violating the Competition Law by colluding with each other to increase insurance fees for motor vehicles.

The life insurance market in the first half of the year saw revenue gains of about 25 percent over the same period last year, according to preliminary statistics from the Vietnam Insurance Association.