Insurance industry nears 2010 premium targets

Vietnam’s insurance industry incurs losses in 2008

Tracking a talented traineeAccording to the Ministry of Finance, the overall market earned more than VND25.5 trillion (US$1.3 billion) in revenue in 2009 and reinvested nearly VND67 trillion ($3.5 billion) in the economy, an increase of more than 17 per cent against 2008.

Total compensation last year reached VND9.7 trillion ($510.5 million), a 3.4 per cent year-on-year increase.

In the non-life insurance and reinsurance sectors, 25 out of 27 insurance companies registered revenue growth. Bao Viet Holdings’ revenue rose by 101 per cent to VND3.6 trillion ($193.8 million), while PetroVietnam Insurance (PVI)’s earnings rose 37 per cent to VND2.7 trillion ($145.8 million) and Bao Minh’s earnings rose by 3.28 per cent to VND1.8 trillion ($96 million).

Smaller and newly established insurance firms also saw revenue gains. Viet Nam National Aviation Insurance’s earnings rose 300 per cent, Liberty Insurance Viet Nam’s earnings rose 283 per cent, Agriculture Bank Insurance’s earnings rose 102 per cent and AAA Assurance’s earnings rose 64.4 per cent.

In the life insurance sector, the number of new contracts last year grew 22.4 per cent to 679,710. Revenue collected from new contracts reached VND3 trillion ($158 million), a year-on-year increase of 38.4 per cent. Leading firms such as Prudential, Bao Viet, Manulife, Dai-ichi, AIA and ACE Life earned more than 80 per cent of the total life insurance market revenue.

Viet Nam’s insurance industry in 2009 made up just 2 per cent of the nation’s gross domestic product (GDP). Industry experts said that figure should grow rapidly in 2010 as economic development accelerated and per capita income rose.

Jack Howell, Prudential Viet Nam’s CEO, said strong growth in the local insurance market had proved that Viet Nam had great development potential.

Phung Dac Loc, general secretary of the Viet Nam Insurance Association, said the local insurance market was attractive and still under-exploited, particularly in sectors such as agriculture and housing.

This year, when the economy is expected to rebound strongly, many insurance companies have set high revenue targets. BIDV Insurance Co is targeting a 35-per-cent revenue increase, while Bao Viet Life Insurance is aiming for 9-per-cent growth.

Due to increasing competition, many insurance companies have said they would increase investment this year in product quality, technology and customer service.