Insurance industry forecast to keep thriving in 2020

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Besides the high growth in revenue, insurers have also set to increase their total assets by 13.3 percent against last year to 514.80 trillion VND in 2020, while reinvesting into the economy 433.06 trillion VND, up 15.1 percent against last year.

The insurance industry aims to maintain a high growth rate of 18.42 percent this year, gaining revenue of 188.73 trillion VND (8.1 billion USD), according to the Ministry of Finance’s Insurance Supervisory Authority (ISA). (Photo: VNA)

To meet the targets, Pham Thu Phuong, Deputy Director of ISA, said the authority would continue to improve mechanisms and policies, focusing on restructuring to make the insurance market develop transparently, safely and efficiently as well as in line with international standards.

“In particular, ISA will focus all resources to complete the revised Law on Insurance Business as well as regulations to guide the implementation of the law to make it accordance with the country’s socio-economic development directions as well as international rules,” Phuong said.

Notably, Phuong said, in order to further develop the market and improve the quality of insurance services, ISA would continue to consider and submit to the Ministry of Finance for licensing eligible foreign investors in insurance and re-insurance in Vietnam.

Besides deploying agricultural products as proposed by insurers, the agency would also coordinate with other related agencies to research and deploy other new insurance products in 2020.

Deputy Finance Minister Huynh Quang Hai said ISA also needed to closely scrutinise and have comments from experts and insurers to draft the best revised Law on Insurance Business before submitting it to the authorities for consideration.

In addition to maintaining stable and sustainable growth of the market, besides promoting the training and publication of legal policies, Hai also requested ISA to further strengthen the inspection, supervision and handling of violations in the context of the insurance market’s fast growth.

Phuong reported that the insurance market retained high revenue of 160.18 trillion VND in 2019, up 20.54 percent against the previous year.

Of this total, the revenue from non-life insurance premiums was nearly 52.39 trillion VND and life insurance premiums was 107.79 trillion VND.

Besides maintaining a high growth rate, the financial status of insurance firms has also improved in 2019, Phuong said. Their total assets are estimated to have risen to 15.3 percent to 454.38 trillion VND.

During the period, insurance companies re-invested nearly 376.55 trillion VND into the economy, marking a rise of 16.36 percent year-on-year. They also paid out 44 trillion VND to customers.

According to experts, the fast-growing domestic insurance market should keep thriving thanks to rising living standards and a high gross domestic product (GDP) growth of more than 6 percent annually over the next three years.

The growth potential is great as the country has one of the world’s lowest life insurance penetration levels at less than 1 percent of GDP. The average insurance premium in Vietnam stands at 30 USD, much lower than the global average of 595 USD and Southeast Asia’s average of 74 USD.

ISA reported that the country has 66 insurance companies, which provide more than 850 non-life insurance products and 450 life insurance products.

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