Insurance sector shows significant growth

Thursday, Dec 24, 2015 15:15

The life insurance sector reported growth of 29.5 per cent in premium income, which topped VND36.6 trillion ($1.6 billion). — Photo

HA NOI (Biz Hub) — Insurance enterprises accumulated more than VND152.5 trillion (US$6.7 billion) to reinvest this year, up 18 per cent against last year, the Insurance Association of Viet Nam (IAV) said.

IAV Chairman Phan Kim Bang said in 2015, non-life insurers have invested VND36.4 trillion ($1.6 billion) in the country's economy while life insurers have contributed VND116.1 trillion ($5.1 billion).

Many insurers have bought long term government bonds, of which the 20-year government bonds alone reach VND6 trillion ($266 million), Bang added.

The life insurance sector reported growth of 29.5 per cent in premium income, which topped VND36.6 trillion ($1.6 billion). This is the highest growth rate in life insurance during the last 10 years, Bang said.

Revenue from non-life insurance premium reached VND31.3 trillion ($1.4 billion), an increase of 14 per cent. Insurance premium debts are also better controlled this year, Bang added.

Bang said the financial capacity of insurance companies has been increasing steadily. Total assets of the market players have increased 21.7 per cent against last year, to over VND201 trillion ($8.9 billion), in which the non-life sector accounts for VND70 trillion ($3.1 billion) and the life sector accounts for VND131 trillion ($5.8 million).

Bang added that insurers are performing well in their mission to be the safe financial shield for policyholders, as well as providing more value-added services.

Total insurance indemnity and benefit payments increased 2 per cent, to VND21 trillion ($930 million), in which non-life insurers indemnified VND13 trillion ($580 million) and life insurers paid nearly VND8 trillion ($355 million).

Bang said insurers have actively implemented government policies, such as insurance for offshore fishing vessels, a voluntary pension plan and compulsory fire insurance.

The information was released during an anniversary ceremony held on December 18 to observe Viet Nam Insurance Market Day and the foundation of Insurance Association of Viet Nam on December 24, 1999.

The event, co-organised by the Insurance Association of Viet Nam (IAV) and the Ministry of Finance's Insurance Management and Supervision Department, aimed to look back at the achievements and shortcomings of the year 2015 and predict the market situation in the coming year.

Insurance market restructuring

In 2016, Vietnamese economy is expected to achieve a higher growth rate when joining the ASEAN Economic Community (AEC) and the Trans-Pacific Strategic Economic Partnership (TPP) agreement, Bang said, and added that the insurance demand will increase accordingly and Vietnamese insurance market will develop strongly in the coming years.

Insurers will not only underwrite their current and traditional product lines, but also introduce their new products, such as the voluntary pension insurance, insurance for public and government assets and guarantee insurance, Bang said.

The life insurance sector and non-life sector is expected grow by more than 25 per cent and more than 18 per cent, respectively, in 2016, Bang added.

Speaking at the ceremony, Deputy Minister of Finance Tran Xuan Ha appreciated the efforts of insurance authorities as well as the companies.

Ha said the insurance market has developed steadily, and assets and premium revenue of insurance companies has increased, asserting its role in the country's economy.

Ha said 2016 is the first year of implementing the Ministry of Finance's Insurance Market Development Plan from 2016 to 2020, and added that insurance authorities and companies need to initiate an action plan and better solutions for the new period to ensure sustainable development of the insurance market.

He also ordered the insurance authorities to strengthen control over businesses to ensure healthy competition among insurance companies. — VNS

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