A member of staff ar Bao Viet Life Insurance Company provides instructions to a customer. The insurance market experienced a lower rate of growth in the first half of this year as many enterprises tightened their belts. — VNA/VNS Photo Tran Viet

HA NOI (Biz Hub)— The insurance market experienced a lower rate of growth in the first half of this year mainly because many in the business community are in economic difficulties, according to Trinh Thanh Hoan, Director of the Ministry of Finance's Insurance Supervisory Authority (ISA).

The ISA's statistics showed that non-life insurance premiums in the first six months of this year came to a total of VND11.8 trillion (US$562 million), a rise of only 2.2 per cent over the same period last year.

The rise was substantially lower in comparison with the same periods over the last two years, which were recorded at around 20 per cent, Hoan said.

Life insurance also struggled to maintain a growth rate of 13 per cent, reaching VND9.1 trillion ($434 million).

In total, all insurance premiums experienced a growth rate of 6.86 per cent over the same period last year, down from the growth rates of 2012 and 2011 which came in at 17.8 per cent and 22 per cent respectively.

The figures reflected that the insurance market was slowing down, which were mainly attributed to the range of economic difficulties that were adversely impacting on domestic businesses, said Hoan.

According to the ISA Deputy Director Phung Ngoc Khanh, the insurance industry aimed at reaching a total premium of VND43.711 trillion ($2.082 billion) this year, a rise of 6.5 per cent over last year.

More than 54 per cent of this was non-life insurance, which recorded a growth rate of only 5 per cent but life insurance is expected to grow at 9 per cent.

Experts at the ISA's conference on Monday to review the insurance market performance in the first half of the year also pointed out that the insurance market was too complicated and managing it was difficult due to the lack of an adequate information system, which would prevent fraud and link enterprises together electronically.

The ISA will upgrade the management regime in the coming months, Khanh said, adding that inspections could also be carried out at some insurance companies, including BIDV Insurance Joint Stock Corp, ACE Life Viet Nam and the Vietnam Airlines Insurance Joint-Stock Company.

Figures show that there are 58 insurance companies currently operating in the country, 29 of which are in non-life insurance, 13 life insurance, 12 insurance brokers and 2 are reinsurance companies. — VNS