Insurance premium grows 20% to $1.5b year-on-year

Total insurance premiums are estimated to have reached VND30.69 trillion (US$1.57 billion) this year, a rise of 20.3 per cent on last year, according to the Ministry of Finance's Insurance Management and Supervision Department.
 

The department reported non-life insurance premiums contributed roughly VND17 trillion ($871.8 million), up 24 per cent on last year.

Life insurance premiums rose 16 per cent to VND13.69 trillion ($702 million).

This year also saw insurers pay out more than VND12 trillion ($615.4 million) in claims to institutions and individuals.

Director of the Department Trinh Thanh Hoan said next year they would streamline the existing regulations to further develop the insurance market and encourage institutions and individuals to take out insurance.

Insurers would be encouraged to provide insurance to the agriculture, forestry and fishery sectors and in remote areas, Hoan added.

He said the department also planned to submit proposals to the Ministry of Finance for licensing the establishment of 3-4 insurers and insurance brokers next year.

According to the department's statistics, the country has 53 insurers, including 29 non-life insurers. There are also 12 life insurance and 11 insurance brokers. The country has only one re-insurance firm.

The department forecast the total insurance premium would reach VND35.29 trillion ($1.8 billion) next year, up 18.8 per cent year-on-year. Non-life insurance would see big rises of roughly 22-25 per cent to VND20 trillion ($1.03 billion) while life insurance rise would be 12-15 per cent.

General secretary of the Viet Nam Insurance Association Phung Dac Loc also believed the insurance market would experience strong growth next year as the Government had targeted a GDP growth rate of 7 per cent.

"Strong economic growth, which helps lift worker incomes, will lead to further development of the insurance market," he said.

Loc anticipated the life insurance market would grow roughly 18 per cent next year with mixed insurance as the key product.

He said there were still plenty of domestic opportunities for insurance companies to expand, with just 5 per cent of the total population holding life insurance. Loc estimated that roughly 30 per cent of the country's population could afford to take out insurance policies.

The Business Monitor International also reported this year that Viet Nam's insurance market was likely to see strong growth with total premiums of up to VND58.45 trillion ($2.99 billion) by 2014. This would include non-life premiums of VND27 trillion ($1.38 billion).

Source: VNS