Insurance market expected to grow 20 per cent

Insurance market expected to grow 20 per cent

HÀ NỘI — Việt Nam’s insurance market is expected to achieve a growth rate of more than  二0 per cent this year, according to Việt Nam Report (VNR).

Insurance market expected to grow 20 per cent

On the list of  一0 most prestigious insurance companies in Việt Nam in  二0 二0 released by VNR, up to  九0. 五 per cent of surveyed businesses were optimistic about the insurance sector in the second half of the year.

Insurance market expected to grow 20 per cent

According to the report, the insurance market has seen high and stable growth, contributing to building a transparent financial background as well as stabilising the macro-economy.

Total insurance premium revenue last year hit VNĐ 一 六0. 二 trillion (US$ 六. 八 九 billion), a  二 一 per cent year-on-year increase. Total non-life insurance premium was VNĐ 五 二. 四 trillion and life insurance was VNĐ 一0 七. 八 trillion. Insurers paid VNĐ 四 四 trillion for customers.

VNR said leaders of insurance companies have reviewed their operation and distribution model based on customers, sellers and investments into databases and digital tools due to the effects of the COVID- 一 九 pandemic.

More than half of insurers said their decisions relating to risk management, human resource management, service management and customer approaches and digital transformation have gradually changed with the outbreak, the report said.

However, the insurance industry still saw stable growth as financial and risk management has been improved. Insurance products and services have met customers’ diversified demands.

VNR said three biggest opportunities for the sector would be strong development of technologies in all phases of the insurance value chain, the improvement in people’s awareness about insurance and prospects for the macroeconomy recovery.

Another report from the US-based credit rating agency AM Best provided a “stable” outlook for Việt Nam’s non-life insurance market in  二0 二0.

The reasons for the rating include the relatively high level of risk capitalisation associated with a prudent portfolio and favourable population structure and insurance demand for medium and long-term growth prospects of retail non-life products. In addition, the impact of the US-China trade war may aid Việt Nam as multinational companies look for new markets outside China.

Insurance market expected to grow 20 per cent

Figures from the General Statistics Office showed the total insurance premium in the first half of the year rose by  一 一 per cent from the same period last year. Of which, revenue from life-insurance posted a  一 三 per cent year-on-year increase and non-life insurance was  八 per cent. Life insurers expect to resume their growth in the second half of the year.

Insurers said there were four products with high potential for growth. Vehicle insurance is forecast to grow strongly, especially after Prime Minister Nguyễn Xuân Phúc signed Decree No  七0/ 二0 二0/ND-CP stipulating a registration fee reduction of  五0 per cent for cars. After the COVID- 一 九, people continued to face a new concern with dengue fever and diphtheria. This makes people more interested in insurance than before, boosting life insurance.

The Government’s good control of the pandemic has contributed to enhancing the reputation of Việt Nam to foreign investors. The increase in investment and relocation of production facilities of multinational corporations as well as cash flow given by the Government to support economic development will create growth opportunities for many businesses and public services. This will also open up opportunities for technical property insurance.

Meanwhile, AM Best also forecast that Việt Nam's non-life market will maintain stable capital in the current situation. However, in the medium and long term, insurance enterprises may need to increase capital for growing demand.

Many large international insurance groups that own shares at Vietnamese insurance firms expect to increase their ownerships through additional capital contributions or acquisitions of existing shares. However, this depends on the divestment plan of the Government, which is often delayed due to administrative procedures. — VNS

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