Insurance market sees growth this year despite COVID-19
Viet Nam's insurance market has experienced growth this year, while many other sectors are suffering a lot of negative impacts from the COVID-19 pandemic.
Viet Nam's insurance market has experienced growth this year, while many other sectors are suffering a lot of negative impacts from the COVID-19 pandemic, according to the Ministry of Finance.
The ministry reported total insurance premium revenue in 2020 is estimated at VND184.7 trillion (US$7.86 billion), an increase of 15 per cent compared to 2019. Total non-life insurance premium was VND57.1 trillion (up 8 per cent) and life insurance was VND127.6 trillion (up 19.6 per cent).
Insurers have paid VND48.2 trillion for customers, a surge of 11.4 per cent year on year.
According to the ministry’s Department of Insurance Management and Supervision, the pandemic has been controlled to create a stable business environment for local enterprises, including insurance companies, helping them resume and promote business activities.
To achieve the dual goal of both controlling the pandemic and ensuring economic development, the Government has implemented a series of solutions and policies to remove difficulties and support people and enterprises.
The ministry has also completed policies to support insurance companies for the comprehensive and sustainable development of the domestic insurance market. That would help the insurance companies stabilise their business in the context of a sharp reduction in benefits from investments and interest rates of government bonds as well as the unpredictable development of the pandemic.
The ministry has reduced and simplified administrative procedures to remove difficulties for enterprises. It has also reduced contributions of insurance companies to the insurance protection fund from 0.15 per cent of the total insurance premium revenue to 0.05 per cent.
Meanwhile, insurance companies have reviewed and cut expenditures to improve operational efficiency, and increased charter capital to improve financial ability and expand distribution channels. In addition, they have promoted the development of health insurance and healthcare products.
They have also increased investment in information technology and digital transformation to improve service quality, operational efficiency and risk management ability.
In addition, people’s demand for insurance products is increasing because their awareness of the importance and significance of life and health insurance has been raised significantly, according to the department.
It expects that in the future, the legal framework for the insurance business sector will be completed to create a transparent business environment and favourable conditions for the development of this market.
The domestic insurance market has a high and stable growth but it is still smaller than its potential, according to the department. In Viet Nam, total revenue of the insurance market accounts for 3.07 per cent of the national GDP, lower than the average rate at 3.35 per cent in the ASEAN region, 5.37 per cent in Asia and 6.3 per cent in the world.
The department also reported that in 2020, insurance companies have contributed to socio-economic development with a total investment of VND460.5 trillion, up 22 per cent over the same period in 2019.
By this year, total assets of insurance businesses are estimated at VND552.4 trillion, 20 per cent higher than the same period in 2019. Total equity is estimated at VND113.5 trillion, up 18 per cent.
Insurance products in many fields are not yet developed on the domestic market, such as for natural disasters, public property, import-export, life and healthcare.
So far, insurance companies have products for many major sectors including property, aviation, marine, credit, agriculture and fisheries. — VNS
