General director of the Ministry of Finance’s Insurance Supervisory Authority Phung Ngoc Khanh speaks at the conference. (Photo mof.gov.vn)Hanoi (VNS/VNA) - Vietnam’s insurance industry maintained positivegrowth in the first half of this year, with total revenue surging by 24.35 percentyear-on-year to nearly 71.15 trillion VND (3 billion USD), the Ministry ofFinance’s Insurance Supervisory Authority (ISA) has reported.
During the June 27 conference to review the industry’s performance in the firstsix months of 2019 and implement tasks for the second half of 2019 held in Hanoi,Pham Thu Phuong, ISA’s deputy director, said besides maintaining a high growthrate, the financial status of insurance firms also improved in the period withtotal assets rising by 19.01 percent to 423.42 trillion VND.
“During the period, insurance companies re-invested nearly 342.87 trillion VND intothe economy, marking a rise of 26.17 percent year-on-year. They also paid out 18.65trillion VND to customers, surging 19.61 percent compared with the same periodlast year,” Phuong said.
According to the ISA, the insurance industry is targeting a growth rate of 20 percentthis year.
To meet the target, in the remaining months of the year, ISA’s general directorPhung Ngoc Khanh said the ISA would continue to improve mechanisms and policiestowards focusing on restructuring to make the insurance market developtransparently, safely and efficiently as well as in line with internationalstandards.
“In particular, the ISA will focus all resources to complete the revised Law onInsurance Business as well as regulations to guide the implementation of thelaw according to Vietnam’s commitments in the Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership (CPTPP) as well as other free tradeagreements that the country signed,” Khanh said.
The ISA will also draft policies on micro insurance, compulsory insurance forcivil liability of motor vehicle owners, disaster risk insurance and publicproperty insurance to submit them to the Government for approval.
In addition, the ISA will study to issue policies with the aim of encouragingthe development of new products, especially those in accordance with Industry4.0, as well as social welfare products.
Experts have so far remained upbeat about the insurance industry’s health inthe coming years, forecasting that it would maintain an annual growth rate of10-20 percent. Many banks that co-operate with insurers to providebancassurance products even expect an annual growth rate of up to 30-40 percent.
The fast-growing domestic insurance market should thrive thanks to risingliving standards and a high gross domestic product (GDP) growth of more than 6 percentannually over the next three years, experts said.
The growth potential is great as the country has one of the world’s lowest lifeinsurance penetration levels at less than 1 percent of GDP. The averageinsurance premium in Vietnam stands at 30 USD, much lower than the globalaverage of 595 USD and Southeast Asia’s average of 74 USD.
The ISA reported that the country has 64 insurance companies, including 30non-life insurers, 18 life insurers, two reinsurance companies and 14 insurancebrokerage companies.
There are up to 850 non-life insurance products and 450 life insurance productssold on the Vietnamese market. — VNS/VNA
VNA
