Viet Nam now has 61 insurance companies with 752 branches and over 350,000 agents. — Photo baotintuc.vn

HCM CITY (Biz Hub) —  In 2015 the insurance market has achieved its best performance of the last five years, growing at nearly 22 per cent and earning revenues of over VND68.3 trillion (US$3.1 billion), the head of the insurance watchdog told an ongoing conference in HCM City.

Phung Ngoc Khanh, head of the Insurance Supervisory Agency, told the annual insurance that the non-life premium income was expected to be worth nearly VND31.4 trillion ($1.4 billion), an increase of 14 per cent year-on-year.

Life insurance premiums would be worth VND37 trillion ($1.7 billion), up nearly 30 per cent, he said.

Viet Nam now has 61 insurance companies with 752 branches and over 350,000 agents.

The rapid growth notwithstanding, the industry faces many challenges including intense competition, especially with the country global integration with the signing of the Trans-Pacific Partnership and several free trade agreements.

To survive and be more competitive, it is now time to rethink risk management, the conference heard.

Saman Bandara, deputy general director of EY – formerly Ernst & Young Viet Nam, the conference organiser, said the industry needed risk management because "it is no more young".

"It is growing fast and so are the risks."

The impact of regional integration was showing, and other industries like banking were moving ahead, he pointed out.

Risk management would help create discipline in the market, which would engender public confidence and increase value for shareholders, he said.

Speaking about risk management at Vietnamese insurance companies, he said the insurers lacked management oversight of risk management and the risk management function was not formalised and was not part of strategic priorities.

The lack of a reporting mechanism to report and address identified risks meant risk management was more reactive than proactive, he added.

Nguyen Thanh Nga, director of the Insurance Research and Training Centre, said the system to control risk at insurance companies had not worked effectively.

Human resources managing risk were not independent, she said.

Few insurers had a department specialising in risk management, she said, adding only 15 out of 28 in the non-life segment do. — VNS